The company seemed to be serious about becoming a player. Even in its first version, PerformancePoint encompassed a comprehensive approach to BPM. It included data visualization and dashboard functionality, which Microsoft purchased through its acquisition of ProClarity, and it included a planning and reporting platform that Microsoft spent several years developing. The company sounded a populist note in its PerformancePoint promotions. It claimed that the BPM suite, which fell under the wide Office umbrella, would expand the scope of BPM beyond finance, bringing it to desktops throughout the organization. That was an attractive idea, but the shine wore off pretty fast. (Read more below.)

Analyst firm IDC recently raised its projection for 2009 growth in the SaaS software market overall (i.e., not only among firms that specialize in SaaS performance management solutions) from 36 percent to 40.5 percent. How is this possible as the rest of the software industry is hurting? "People are likely to be commitment-phobic," suggests Ray Wang, an analyst with Forrester Research.

Although she has disappeared from the spotlight, the position remains. Gary Cokins, the global product marketing manager for performance management at SAS, argued online last month that not only is "CPO" a position worth filling, but its existence at such a high level in the U.S. government gives the entire discipline of performance management a certain validation.

"Some may argue," Cokins says, "that creating one more C-suite position excessively distributes the responsibilities of the existing executive team." However, research suggests that those companies which excel at performance management tend to implement offices of performance management and institute positions such as chief performance officer. Cokins and Bob Paladino — who at one time headed up the office of global performance for communications system provider Crown Castle International — explored this research in an August 2007 article for BPM Magazine. Today Cokins says that the research indicates "the … practice of establishing an OSM [Office of Strategy Management] and CPO is an accelerator to successful strategy achievement" — which he takes to mean that "President Obama's approach by naming a CPO is effective." If only the president could find someone with no tax problems to fill the job!

The company seemed to be serious about becoming a player. Even in its first version, PerformancePoint encompassed a comprehensive approach to BPM. It included data visualization and dashboard functionality, which Microsoft purchased through its acquisition of ProClarity, and it included a planning and reporting platform that Microsoft spent several years developing. The company sounded a populist note in its PerformancePoint promotions. It claimed that the BPM suite, which fell under the wide Office umbrella, would expand the scope of BPM beyond finance, bringing it to desktops throughout the organization. That was an attractive idea, but the shine wore off pretty fast.

In late January, Microsoft surprised almost everyone by announcing that it was going to roll PerformancePoint's scorecard, dashboard, and analytics functionality into SharePoint Server and rebrand those capabilities "PerformancePoint Services for SharePoint." Kurt DelBene, senior vice president of the Office business platform group at Microsoft, said that the change helps Microsoft fulfill PerformancePoint's original mission of "bringing BI to the masses." At the same time, the company announced that it is discontinuing PerformancePoint Planning, rolling features into Microsoft Dynamics.

No longer will PerformancePoint be sold as an independent piece of software. Microsoft does intend to release an Office PerformancePoint Server 2007 Service Pack 3 later this year to fix bugs in the planning module, and it claims that it will continue providing support for the BPM suite for the next decade. Clearly, though, PerformancePoint did not live up to the initial hype.

By the end of last year, Microsoft's product road maps lacked information about substantial new investments in PerformancePoint functionality. Still, most watchers of the BPM market (myself included) were surprised that the product was essentially killed. What happened?

John Colbert, vice president of research and analysis for BPM Partners, sees two primary factors as driving the product's demise. First, he says, although Microsoft claimed to target both business and IT professionals, ultimately PerformancePoint was an IT platform and was not a particularly business- or finance-friendly product. "Microsoft clearly tried to commoditize performance management and business intelligence in a single platform, which they did by empowering the IT department to develop a wide range of capabilities on the PerformancePoint platform," Colbert says. "But we at BPM Partners feel performance management and business intelligence applications aren't successful if they can't support the business user in some capabilities, independent of IT."

In addition, Colbert says that Microsoft turned out to be impatient. Their version 1 product took on much more mature products — even as economic crisis hit the nation — and it seems that it did not generate the results Microsoft wanted as quickly as it expected.

Colbert's explanation echoes comments Nigel Pendse, of the OLAP Report, made in September 2007, after receiving a preview of the exciting new BPM suite: "Both building and using models are more technical than we would like. The clunky user interface certainly requires more work. Application development with PerformancePoint may be more laborious and hit-or-miss than with more mature products."

Pendse now reflects that the complex PerformancePoint Planning needed quick follow-up releases to incorporate early customer feedback, but Microsoft unwisely tied the releases beyond version 1.0 to Office updates. Those multiyear release schedules "are entirely suitable for widely deployed, mature products like Office, but entirely unsuitable for an incomplete young product like PerformancePoint Planning. … While Microsoft could price PerformancePoint as low as it liked, there was no getting around the fact that the planning component was an inherently complex application and quite unlike the tools that make up the rest of the Microsoft BI product line."

As a result, PerformancePoint's thousands of beta testers did not translate into thousands of paying customers. How does this fact reflect on the BPM market as a whole? The answer from John Colbert is: It doesn't. He points to the BPM vendors that are thriving as the economy requires companies to gain better insight into their performance. "PerformancePoint was a misfire on Microsoft's part. It was too complex, and bringing it to maturity would have taken more time than Microsoft was ready to invest. Independent of Microsoft’s pull back, our research shows that BPM is still a very healthy market."

For companies that invested in PerformancePoint installations for the functionality that was formerly ProClarity, SharePoint may still offer a good solution. And for companies that already run Microsoft Dynamics, PerformancePoint's planning capabilities might continue to be appealing. For other organizations that bought PerformancePoint, well, as this issue's Product Briefs section (above) suggests, a lot of vendors with better-established performance management systems would be happy to help you migrate.

Meg Waters
Editor in Chief, BPM Magazine