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Microsoft seeks intelligent business

Microsoft Office, the familiar toolbox of desktop computing, is a huge and lucrative business, but demand for it has slowed. In a new bid for growth, Microsoft Corp was due to announce yesterday that it is making an ambitious push into the US$13-billion-a-year market for business-intelligence software.

The company is trying to lure new business by extending Office well beyond its well-known programs for creating documents, spreadsheets and presentations. Business intelligence software is used to help workers quickly find and analyze information inside their corporations. The programs offered by a variety of suppliers range from software used to retrieve hourly or daily sales results automatically to sophisticated analytics programs used to detect fraud and money-laundering.

The company is positioning its new product, Microsoft Office Business Scorecard Manager, as an inexpensive, easy-to-use entry in the business intelligence market.

"What Microsoft has done over the years is bring technology to mass markets, and we think the time has come to do that with business intelligence software," said Jeff Raikes, president of the company's business division. "And we're building it into the Office tools that are familiar to everyone."

Microsoft was also scheduled to announce yesterday that the new version of Office, scheduled to be introduced next fall, will have added business intelligence features.

From an Excel spreadsheet, a user will be able to use Web links to tap into corporate databases. And groups of workers will be able to use business intelligence features on SharePoint, a digital work space that can be shared by teams of workers.

The Business Scorecard Manager is much like a desktop dashboard for information, which the user can configure to fetch and display relevant data on sales, manufacturing, finance or other areas. A sales manager, for example, might see that daily sales reports are falling behind forecasts. The manager can then query several databases, see which accounts are falling behind, determine the common characteristics and jointly draft a catch-up plan with the account managers.

The move by Microsoft is its latest step to breathe new life into its big Office business. The company's information worker group, which is mainly Office, had sales of US$11 billion in the year ended in June, and operating profits of US$7.9 billion. But revenue growth has since slowed.

"Microsoft is looking for whole new markets for Office," said Richard Sherlund, an analyst for Goldman Sachs.

Microsoft must also add new capabilities and bind them to the basic Office programs to try to fend off competition from free open-source products and free Web-based alternatives.

The Microsoft growth strategy includes a technical overhaul. The company is trying to transform Office from an isolated set of desktop programs to a workbench with links into all of the corporate information used to manage a business, using Web-based technology.

"Fundamentally, it's a shift from Office as a bag of tools to a platform that companies use to run their business," said Peter O'Kelly, an analyst at the Burton Group, a research firm, who has been briefed on Microsoft's plans.
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