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So What Happened?

Posted by Alan on February 10, 2009

Now that I have had time to calm down, I can write this post and hopefully sound rational and not have my blood pressure rise along with my desire to drive to the airport, buy an airline ticket, fly to Redmond and rip someone a new one.  I hope you enjoy it!

Please remember that everything I talk about in this post is my opinion and my opinion only.  It is based on my personal observations and interactions and nothing else.  Everything I say from this point on could just be a huge, steaming pile of horse dung and I could have it all wrong.  I doubt it, but on the rare occasion I have been known to err…

What do I think?  It is one of two things.  Either upper management within Microsoft does not understand the business applications market space or upper management does not want to be in the business applications market space.  Microsoft’s entry into business applications started many years ago with the purchase of Great Plains Software.  Eight years is plenty of time to learn this market in detail, even if you are totally inept.   You can say many things about Microsoft but they are never totally inept.  So to me, that means the only rational conclusion left is that Microsoft just doesn’t want to be in the business applications game.  Just so we are all on the same page let me define what I mean by “business applications”.  I would classify PerformancePoint as a business application and definately the products under the Dynamics banner.  Office I would classify as a productivity tool.  SharePoint is 50/50 but most who know it would say it is more platform that it is application. 

I believe the people currently in charge are only concerned with platform and infrastructure sales and could not care less about business applications.  In fact, I think that they believe business applications actually distracts from the core of Microsoft business.  Are they right or are they wrong?  I don’t know, but to be fair, compelling cases can be made either way.  Ultimately Microsoft has to do what is right for Microsoft.  The problem right now is that business applications exists in mental limbo within Microsoft.  And by not fully committing or fully divesting themselves of business applications, Microsoft is doing a disservice to customers, partners and other stakeholders.    

I first became a Microsoft partner through the acquisition of Great Plains Software, up to that point everything I did somehow tied back to the folks in Fargo, ND.  Right away it became apparent that the Microsoft “classic” people (as we called them) just didn’t get it.   They were concerned about quantity and not quality and quick, quick sales.   I swear that I have met people who would rather have 10 software sales at $25,000 each rather than one single sale at $300,000.  And forget about a sale cycle that takes longer than a couple months — if you can’t close it this month then don’t bother me.  I had hoped that over time this would get better.  It hasn’t.  And unfortunately the champions of business applications have slowly, one by one, left the Microsoft fold.  The crowd in charge today are those who only want or understand platform and infrastructure.   

Think about this.  If an organization of any substantial size is going to deploy an new planning/budgeting solution they are not going to embark on the project on a whim.  It is like a new ERP system where the ripple effect throughout the organization can be huge.  Therefore, it takes some time to decide even if it is something they want to do or not.  Once the decision to begin looking is made, then the organization is going to do some research, send out some RFI’s and then some RFP’s and then perform vendor interviews, followed by demos and probably some proofs of concept.  And once they finally decide on a vendor, then they have to fit the deployment into the next budgeting cycle.  All this takes time and I am convinced that for most large organizations this cycle is somewhere between 12 to 18 months.  Considering that PerformancePoint was only released towards the end of 2007 and nobody trusts a v1.0 product from Microsoft anyway — how many sales did they expect by now?!?!?!  It is only in the next 6 months that a rational and logical person, who understands business applications, would expect sales and implementations of Planning to take off.  I guess those type of people are in short supply at Microsoft. 

[Side note:  This whole decision won’t help the reputation of Microsoft and v1 products.  I know for a fact that we will never ever again touch another v1 from Microsoft.]

Microsoft panicked.  They were not going to hit forecasted sale numbers in a big way and were facing the first ever corporate-wide layoffs.  The powers that be gave a superficial look at Planning and decided to kill it off.  They simply looked at raw sales figures and ignored business cycles, the competition and the pull through of the rest of the Microsoft stack that comes with Planning.  I have received feedback from different people who implement Cognos, Hyperion or Business Objects for a living.  Those products were competing effectively today against Planning v1.0, but they were scared, very scared, of v2.0 and beyond. 

If only Microsoft had some sort of solution that would have allowed them to better analyze their data and the market.  Oh wait, they did.  Maybe if they had actually used the ProClarity components they bought, rather than just killing them off, they would have seen the goldmine they were sitting on with PerformancePoint Planning. 

The fact that even today, weeks after the announcement, they still cannot provide simple answers to simple questions shows that this was not a well thought out decision!!!      

Given all that has happened, I really worry about the future of Dynamics.  I hope that the next time the keep/kill decisions happen, if Dynamics does not make the cut, then Microsoft will at least take the time to put a plan together to sell off the division rather than just abandon it and leave everyone out in the cold.

Believe it or not this whole thing has made me realize the difference in working with an organization that understands business applications and one that doesn’t.  I have also realized how much I actually miss the Ground Round, the Rock, the Northern Exposure, the Old Broadway, and even the Fargo Holiday Inn.  I realize that not all of you will understand that last line — it is there for those that do.

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6 Responses to “So What Happened?”

  1. Well said, Alan.

    I believe that any attempt to sell “BI to the masses” from here on shall fall on deaf ears. Customers will generally smile politely and move on, while Partners will (as you suggested) be more likely to avoid investing time and energy in v1 products.

    Presently, there is a discussion thread in the TDWI LinkedIn group about the future of BI. Anyone worth their salt in the BI space knows that “BI to the masses” has more to do with broader uptake within an organization (of any size) than selling on volume to the mid-market. Selling it as “Your cool title here” BI is simply more jargon that brings a chuckle to most executives and managers with purchasing power; this is often revealed by sitting down and actually listening to customers and prospects. Ultimately, such uptake within organizations is driven by the requirement to drive business performance using agile closed-loop capabilities (methodologies, technologies, and competency centres in more mature environments). Here, Bruno Aziza’s book “Drive Business Performance” resounds of how “BI to the masses” really should work, and demonstrates case studies of how it has in practice. Our experience showed that the marketing messages around “Microsoft Performance Management” were effective. Customers saw the value of the entire PerformancePoint footprint, particularly in their historic pains with competing product suites. Seeing the technology in action proved the point, and those partners who were able to speak the language of the business (and not tech-speak) experienced growing numbers of happy customers, interested prospects and growing success.

    I think customers and partners could have stomached a move to rope the entire PerformancePoint footprint into SharePoint, however, by excluding Planning, the message from Microsoft interpreted by customers is essentially:

    – Planning is too complex and therefore doesn’t matter;
    – Planning is not relevant in the purview of “BI to the masses”, and;
    – Planning’s key target audiences (finance, operations and sales execs and managers) aren’t part of the “masses”

    (The interpretation I mention here comes directly from our customers, none of whom were consulted on their take on whether PerformancePoint Planning was important/useful/better than the competition)

    I think you and I (and certainly more than a few other customers and partners reading this) know different. Anyone who attempts to position the value proposition of BI without considering the business case of Performance Management is ultimately missing the point. Clearly, customers get this: they invariably ask “how do I provide feedback in the form of annotations, stretch targets/budgets into the system” to drive performance (for us, this was 100% of the time), and shall now look to competing products when it is revealed that they need to buy something else from Microsoft, and, that the “something else” would require additional time and money to replicate the integration afforded by PerformancePoint Server.

    Please keep up the great work, Alan, and keep your head up.

    – AD

  2. Alan said

    Adrian,

    Great information in the comment. I think you are spot on with your observations. Now that you state it, I am totally on board with the belief that because Microsoft doesn’t understand the value of Planning to the mid-market then Microsoft somehow has equated that it is not important to the mid-market. I also like your take on how Microsoft’s statements mean that the finance, operations, sales executives and managers are not part of the “masses”.

    Hang in there.

    Alan

  3. Alan:

    Nice post – very well thought out.

    I am not in complete agreement with all your points. Specifically, my experience with the middle market indicates that very few companies truly invest in a complete planning solution. They will do budgets and, in some cases, forecasts to update the budgets, but do very little with respect active performance management tied to a systemic and organized planning initiatve. For some, they don’t seem to be able to afford it. For others, they don’t seem to have sufficient alignment to make it work. But as a result, most just don’t do it. To get a feel for the market potential, just look at how few people implemented Forecaster or Enterprise Reporting. I know they are very budget and forecast focused, but if you consider them the entry level products to PPS Planning, you can see that a more sophisticated step up was going to be a rare event.

    By moving the visual display of underlying business data back into PPS, MS accomplishes two very important things for my customer base:
    1. They reduce the cost of the EA that was already getting very expensive and very complex to license
    2. They move the immediately useful portions (stuff that can be deployed quickly over existing budgets and actuals) of PPS into MOSS for faster, easier deployment. Note I didn’t say “only useful” just “immediately useful”. With bad economics in play, getting better views into existing data with quickly deployed targets is more useful to companies who just can’t put together a complex, systemic planning exercise.

    As always, I love your comments around PPS and enjoyed meeting you last Oct at the BI conference. Keep up the good work.

    Dwight

  4. Alan said

    Dwight,

    I agree with where you were coming from however given what we were seeing, I think PPS finally gave the mid-market clients a solution they could affor and could get their “heads around”. That was what was so great about it.

    Forecaster was budgeting only and no M&A and reporting was pretty much non-existant so was by itself only about a 40% solution. Enterprise Reporting has PPS like functionality but was always treated as the red-headed step-child that nobody seemed to care about.

    My biggest worry is that M&A in SharePoint now becomes an after thought by that group and not get the focus it deserves. Time will tell on that one. Plus the competition (if they are smart) will be hitting hard on the fact that the M&A is now worth what you pay for it. Be prepared to compete against that.

  5. Matt said

    I believe Alan is speaking about the Forecaster 6.7 version having no reporting. The 7.0 version introduced a solid report solution that have have a number of features that aren’t even supported in FRx and/or Management Reporter. Reporting included conditional formatting and other features that allow users to more easily ‘monitor’ how their key measures are doing.

  6. Alan said

    You are right Matt. For me Forecaster pretty much ended at version 6.7. By that release we were already into PerformancePoint deployments and that was our defacto tool. Once we get an actual roadmap from the Dynamics group we will be making the decision on Forecaster as a go-forward tool or not for us. And if so, then I guess I get up to speed on Forecaster 7.0. Good to know that the reporting is stronger now.

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