By using website you agree to our use of cookies as described in our cookie policy. Learn More


Analysis: PerformancePoint’s Cost Not Likely to Be a Showstopper

For small and medium-sized enterprises, PerformancePoint could be a godsend

Microsoft Corp. finally took the wraps off its long-awaited PerformancePoint Server 2007 product last week. It is Microsoft’s most ambitious performance management (PM) offering to date. Yes, the software giant has dabbled in PM in the past—most notably with its Business Scorecard Manager (BSM) 2005 product, along with a few PM-oriented SQL Server Accelerator offerings—but PerformancePoint Server, which incorporates both homegrown assets and technologies from the former ProClarity Corp. (and which has been incubating for two years and more, according to Microsoft officials), is an altogether more serious candidate.

It ships with a price tag that befits its seriousness. True, at an estimated $200 per user, PerformancePoint Server won’t break the bank. On a per-user basis, it costs about as much as Office or a Microsoft desktop operating environment.

Unlike most of Microsoft’s other business intelligence (BI) tools, however, PerformancePoint has an explicit cost attached to it. As a result, it might not be quite as attractive to rank-and-file Microsoft data management (DM) pros, who are accustomed to SQL Server’s OLAP, data mining, ETL, and reporting freebies.

Just how much will PerformancePoint Server cost? Prepare for a $20,000 per server license price tag, plus $195 per user, according to Microsoft’s official pricing guideline. That's just the beginning, since PerformancePoint Server doesn’t run in a vacuum; it’s designed to bolt on top of SQL Server 2005, too. That complicates things—even if (like most shops) you already have a SQL Server license.

"A preliminary tallying of [PerformancePoint’s] cost is that [Microsoft] tell[s] you about the $200 per-person cost, which is great except that it's predicated on other things like a … SQL Server license, complete with CAL-based costs. Other features take other things," comments data warehouse architect Mark Madsen, a principal with consultancy Third Nature. Of course, for a lot of Microsoft shops, the cost of SQL Server itself is a moot issue: the vast majority of Microsoft BI shops are already running SQL Server, Madsen acknowledges.

All the same, anyone who ponies up the cash for PerformancePoint Server will probably want to deploy it on top of a dedicated SQL Server RDBMS. That means buying another SQL Server license.

Industry veteran Rajeev Rawat, founder and CEO of consultancy BI Results LLC, doesn’t think PerformancePoint’s price tag will be a deal-breaker for Microsoft shops. For one thing, he points out, while rank-and-file DM pros might not be all that excited about Microsoft’s newest PM deliverable, business users on the finance side of the aisle undoubtedly are. In this respect, PerformancePoint—along with its predecessor (BSM 2005)—aims at a very different audience.

It also addresses a different market segment than many PM solutions, Rawatt continues. "PerformancePoint Server is another major advance in Microsoft's democratization of BI for the masses. It does not matter at this juncture what the price points or functionality look like. Microsoft has packaged application, BI, and server functionality to ease the pain for [small-to-medium enterprises], the largest of the business growth segments," he points out.

One upshot of this, Rawat argues, is that mainstream BI and PM vendors will now "have to compete on Microsoft’s terms." He doesn’t see this as a bad thing, however. "PerformancePoint [Server] will need features and functional maturity to match or exceed what specialty solutions have refined over decades in their data models, analytic analysis, sophisticated algorithms, and domain knowledge," he observes. "Along the same lines, [Microsoft] will also need to match the channel coverage and skills competency to match today's leaders."

Factoring in SQL Server Costs

While its price might cause some SQL Server DM pros to do a double-take, PerformancePoint could complicate things for mainstream BI and PM vendors on the pricing front. "I think there's price pressure on BI vendors, since a choice of [PerformancePoint] means you probably already have the sunk cost of SQL Server and maybe other things too," indicates Third Nature’s Madsen.

The PerformancePoint Server 2007 product isn’t by any stretch of the imagination a slam dunk—Madsen cites metadata management issues, among others—but, if it hews to Microsoft’s traditional product development model, it should evolve into a reasonably feature-complete offering over its next two iterations. Once that happens, Madsen points out, Microsoft’s highly integrated BI and PM stack could become an even more attractive proposition to many enterprise and SME buyers.

After all, he observes, SQL Server Reporting Services is by no means the best reporting tool on the market. However, thanks to its tight integration with the rest of Microsoft’s SQL Server-based BI stack, it’s a good enough reporting tool for many customers.

One such prospective customer is Mark Feferman, a SQL Server technologist who likewise requested that his employer not be named. Feferman says he isn’t all that interested in PerformancePoint Server 2007, but is curious to see how Microsoft evolves that product. A feature-complete PerformancePoint Server coupled with Microsoft’s all-in-one licensing model could make for an intriguing combination, he indicates.

"[T]he licensing can be quite compelling … if what's coming down the pike—i.e., future releases—have as much advancement as going from the [SQL Server 2000] platform to the [SQL Server] 2005 platform [did]," says Feferman, whose company is a big user of SQL Server.

TDWI Membership

Get immediate access to training discounts, video library, research, and more.

Find the right level of Membership for you.