Oracle and Microsoft lead BI squeeze

During October, Microsoft and Siebel (soon to be acquired by Oracle) both announced products that show business intelligence (BI) software is no longer the preserve of specialist vendors.

Experts say giants such as Microsoft and Oracle may develop BI products with a broader appeal than those of BI specialists.

They agree specialist BI vendors, such as Business Objects, SAS Institute, Cognos and Hyperion, still have an edge over the giants both in technological clout and market share, but Alys Woodward of analyst Ovum said their leadership is under threat. "Microsoft is developing BI into its front-end [desktop] technology, and Oracle and SAP are developing it into their back-end applic- ations," she said. "The incumbents will get squeezed in the middle."

Microsoft Office has 400 million users worldwide. The firm recently said it will introduce more BI functionality with its forthcoming Office 12 desktop suite, through imp- roved support for its SQL Server 2005 Analysis Services Olap software and enhanced graphical capabilities in its Excel spreadsheet.

Microsoft will follow its usual route into new markets by offering a relatively basic product that is cheaper than alternatives, predicted Woodward. "Office 12 will make it harder for IT directors to get funding to buy extra BI functionality from other vendors when Excel will be good enough to do the job in many circumstances," she said.

Darren Strange, Microsoft's Office 12 UK product manager, said the new suite will offer a "cost-effective" way for firms to give more staff access to business performance data. However, Phil Wood, product marketing manager at Business Objects, argued that if firms deploy all the Microsoft tools required to fully enable BI, including SQL Server 2005 and SharePoint Portal technology, then Microsoft may be expensive. "There will be a cost shock for [Microsoft] customers," he said.

At Siebel's CustomerWorld conference in Boston last month, chief executive George Shaheen said its recent BI software developments would prove valuable for Oracle. His comments followed the launch of a new version of Siebel's Business Analytics platform, featuring integration between its BI functionality and customer relationship man- agement (CRM) applications to give users, such as call centre staff, real-time access to customer data and guided decision-making.
Oracle and SAP are integrating similar analytical BI functionality with various applications to give them broader appeal.

The BI specialists argue that BI functionality from companies such as Microsoft with heterogenous applications will be inferior to that offered by applications designed specifically for the purpose.

However, with Microsoft poised to compete on price, and Oracle and SAP competing on the level of integration with the application stack, BI specialists face a challenge to maintain their appeal to cost- and brand-sensitive buyers.