Microsoft Unveils New SPO Product and Strategy

Transcription

1 Event Summary Microsoft Unveils New SPO Product and Strategy Abstract: Microsoft officially announced the availability in North America of the Microsoft Business Solutions Professional Services Automation product, which is also known as service process optimization. By Ted Kempf and Matt Light Strategic Planning Assumptions Through 2005, as a result of continued market penetration of enterprise application suite vendors, SPO will maintain its high growth, averaging between 35 percent and 50 percent year over year (0.6 probability). By 2007, integrated SPO functionality will become a mainstream cost of doing business to be used by 70 percent of professional service organizations and 60 percent of embedded service divisions of enterprises with $1 billion or more in revenue (0.6 probability). Publication Date: 13 January 2003

2 2 Microsoft Unveils New SPO Product and Strategy Event Summary In late September 2002, during Microsoft Business Solutions' annual partner conference, the company announced that it would deliver its own service process optimization (SPO) solution in the fourth quarter of On 9 December, Microsoft announced the availability of this solution for North America. Microsoft refers to its SPO solution as Microsoft Business Solutions Professional Services Automation (PSA). The term PSA is also widely used in the market to describe this relatively new suite of software. This announcement makes Microsoft the sixth major enterprise application vendor to either enter this space or express sincere interest in entering. The other five vendors are PeopleSoft, Lawson, SAP, Oracle and Siebel. A number of best-of-breed vendors and smaller enterprise application vendors remain in the market, including Evolve, Novient (solution6), Changepoint, Business Engine, Planview, Niku, Tenrox, Aggresso and Maconomy. Microsoft also unveiled its new Microsoft Business Solutions division. This division includes the businesses of the former Great Plains, Microsoft bcentral and Navision software. Two Approaches to SPO Before the SPO announcement, the Microsoft Project business unit, which is responsible for all Microsoft Project applications (Microsoft Project Standard, Microsoft Project Professional and Microsoft Project Server), had forged three premier solution provider partnerships with best-of-breed SPO vendors Business Engine, SharpOwl and Tenrox. Core to these partnerships is Microsoft's ability to fully embed its project management application into these best-of-breed SPO applications and target large and midsize businesses. Besides these three premier partners, virtually every other SPO vendor offers bidirectional integration into Microsoft Project (only the desktop tool, not Microsoft Project Server), given Microsoft's large installed base of customers. Some SPO vendors also offer their own project management functionality as an option. The Microsoft Project business unit has successfully ensured that the Microsoft Project application is included in a significant number of SPO deals either via premier solution provider partnerships or other SPO vendors that are members of the more common Microsoft certified solution partner program. From the end-user perspective, these partnerships can be a bit confusing when it comes to choosing functionality. When Microsoft rolled out its new version of Microsoft Project (Microsoft Project 2002), the company had made some major enhancements including resource management; reporting/portfolio management around projects, time and resources; and time tracking. These enhancements were not made to compete in the SPO 2003 Gartner, Inc. 13 January 2003

3 3 market, but rather to compete against the traditional project management vendors, such as Primavera and Artemis. By introducing these enhancements, Microsoft effectively developed and purchased functionality that many of its SPO partners already offer, particularly resource management and time tracking. Therefore, end users are often tasked with having to pick between certain functionality offered by Microsoft and the SPO vendors. For example, an end user who prefers the resource management functionality of an SPO vendor can opt to use that functionality and use Microsoft only for project management. Microsoft Business Solutions PSA The new Microsoft Business Solutions PSA offering represents the integration of Solomon Project Series, Microsoft Project Professional 2002 and Microsoft Project Server Combined, this software package includes the major components of an SPO application, project management, resource management, opportunity management/demand management, project accounting, time and expense capture, reporting, and portfolio management. The target market for this application is small and midsize businesses with project-based work that is delivered to external or internal clients. According to Microsoft, the target company will have between 25 and 500 employees. Moreover, the Microsoft Business Solutions PSA product will integrate with only one financial application suite, Solomon Edition. This is a unique position taken by Microsoft, given that other enterprise resource planning vendors with SPO applications allow their SPO products to be integrated with other nonproprietary financial packages. In terms of selling the SPO product, the Microsoft Business Solutions division does not have a direct sales force. Instead, it relies solely on its channel partners. According to Microsoft, this channel consists of approximately 4,500 partners worldwide. The channel is expected to initially target smaller enterprises with Microsoft Project and Solomon already installed. Note that Microsoft Business Solutions is targeting both new and established customers. Gartner Dataquest Perspective With Microsoft directly entering the SPO space with its own product and indirectly via software partnerships, deciding which product to purchase can be daunting. To help companies choose which Microsoft technology would be most suitable, Gartner Dataquest provides the following two scenarios: An environment best suited for Microsoft Project 2002 An environment best suited for a Microsoft PSA solution or a combined Microsoft Project 2002/premier solution provider solution 2003 Gartner, Inc. 13 January 2003

4 4 Microsoft Unveils New SPO Product and Strategy The days of traditional project management software tools that focused solely on task list construction, task scheduling, resource scheduling and project progress tracking are long gone. Virtually every project management tool in the market offers at least some form of role- or skillbased resource management search capability as well as Web-based time reporting. Microsoft Project 2002 This is suitable for enterprises or departments with needs that primarily center on more-traditional project planning as well as resource and project scheduling. The organization is most likely interested in straightforward resource search functionality and can live without searching based on other characteristics such as indicating how important skills are, years of experience or consulting/employee interest in working on a project. Webbased time capture (not including expenses) is also of interest; however, some limitations remain. For example, the application does not offer project managers the ability to approve a consolidated timecard. Instead it requires managers to approve each timecard individually. This is fine for smaller teams, but it will prove problematic for larger organizations. This department will be interested in gaining insight into its resources, projects and time spent on projects via the portfolio management module. Microsoft Project 2002 and Premier Partners Solution These choices are suitable for enterprises or departments that require additional functionality to optimize the business processes that surround the management and delivery of services. Included are enhanced analytics, portfolio management, opportunity/demand management, knowledge management, Web-based time and expense capture/tracking, billing/internal chargebacks, and project accounting. Microsoft Business Solutions PSA Microsoft Business Solutions PSA is suitable for smaller enterprises or departments that require additional functionality to optimize the business processes that surround the management and delivery of services. Included are enhanced analytics, portfolio management, opportunity/demand management, knowledge management, Web-based time and expense capture/tracking, billing/internal chargebacks, and project accounting. Key Issue What are the emerging technologies that will impact the IT professional services market? 2003 Gartner, Inc. 13 January 2003

5 2003 Gartner, Inc. 13 January

6 6 Microsoft Unveils New SPO Product and Strategy This document has been published to the following Marketplace codes: ITSV-WW-DP-0448 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: Entire contents 2003 Gartner, Inc. and/or its Affiliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice