[company]Microsoft[/company] is not content to let Excel define the company’s reputation among the world’s data analysts. That’s the message the company sent on Tuesday when it announced that its PowerBI product is now free. According to a company executive, the move could expand Microsoft’s reach in the business intelligence space by 10 times.
If you’re familiar with PowerBI, you might understand why Microsoft is pitching this as such a big deal. It’s a self-service data analysis tool that’s based on natural language queries and advanced visualization options. It already offers live connections to a handful of popular cloud services, such as [company]Salesforce.com[/company], [company]Marketo[/company] and GitHub. It’s delivered as a cloud service, although there’s a downloadable tool that lets users work with data on their laptops and publish the reports to a cloud dashboard.
James Phillips, Microsoft’s general manager for business intelligence, said the company has already had tens of thousands of organizations sign up for PowerBI since it became available in February 2014, and that CEO Satya Nadella opens up a PowerBI dashboard every morning to track certain metrics.
And Microsoft is giving it away — well, most of it. The preview version of the cloud service now available is free and those features will remain free when it hits general availability status. At that point, however, there will also be a “pro” tier that costs $9.99 per user per month and features more storage, as well as more support for streaming data and collaboration.
But on the whole, Phillips said, “We are eliminating any piece of friction that we can possibly find [between PowerBI and potential users].”
This isn’t free software for the sake of free software, though. Nadella might be making a lot of celebrated, if not surprising, choices around open source software, but he’s not in the business of altruism. No, the rationale behind making PowerBI free almost certainly has something to do with stealing business away from Microsoft’s neighbor on the other side of Lake Washington, Seattle-based [company]Tableau Software[/company].
Phillips said the business intelligence market is presently in its third wave. The first wave was technical and database-centric. The second wave was about self service, defined first by Excel and, over the past few years, by Tableau’s eponymous software. The third wave, he said, takes self service a step further in terms of ease of use and all but eliminates the need for individual employees to track down IT before they can get something done.
IBM’s Watson Analytics service, Phillips said, is about the only other “third wave” product available. I recently spent some time experimenting with the Watson Analytics preview, and was fairly impressed. Based on a quick test run of a preview version of PowerBI, I would say both products have their advantages over the other.
But IBM — a relative non-entity in the world of self-service software — is not Microsoft’s target. Nor, presumably, is analytics newcomer Salesforce.com. All of these companies, as well as a handful of other vendors that exist to sell business intelligence software, want a piece of the self-service analytics market that Tableau currently owns. Tableau’s revenues have been skyrocketing for the past couple years, and it’s on pace to hit a billion-dollar run rate in just over a year.
“I have never ever met a Tableau user who was not also a Microsoft Excel user,” Phillips said.
That might be true, but it also means Microsoft has been leaving money on the table by not offering anything akin to Tableau’s graphic interface and focus on visualizations. Presumably, it’s those Tableau users, and lots of other folks for whom Tableau (even its free Tableau Public version) is too complex, that Microsoft hopes it can reach with PowerBI. Tableau is trying to reach them, too.
“We think this really does 10x or more the size of the addressable business intelligence market,” Phillips said.
A former Microsoft executive told me that the company initially viewed Tableau as a partner and was careful not to cannibalize its business. Microsoft stuck to selling SharePoint and enterprise-wide SQL Server deals, while Tableau dealt in individual and departmental visualization deals. However, he noted, the new positioning of PowerBI does seem like a change in that strategy.
Ultimately, Microsoft’s vision is to use PowerBI as a gateway to other products within Microsoft’s data business, which Phillips characterized the the company’s fastest-growing segment. PowerBI can already connect to data sources such as Hadoop and SQL Server (and, in the case of the latter, can analyze data without transporting it), and eventually Microsoft wants to incorporate capabilities from its newly launched Azure Machine Learning service and the R statistical computing expertise it’s about to acquire, he said.
“I came to Microsoft largely because Satya convinced me that the company was all in behind data,” Phillips said. For every byte that customers store in a Microsoft product, he added, “we’ll help you wring … every drop of value out of that data.”
Joseph Sirosh, Microsoft’s corporate vice president for machine learning, will be speaking about this broader vision and the promise of easier-to-use machine learning at our Structure Data conference in March.
Given all of its assets, it’s not too difficult to see how the new, Nadella-led Microsoft could become a leader in an emerging data market that spans such a wide ranges of infrastructure and application software. Reports surfaced earlier this week, in fact, that Microsoft is readying its internal big data system, Cosmos, to be offered as a cloud service. And selling more data products could help Microsoft compete with another Seattle-based rival — [company]Amazon[/company] Web Services — in a cloud computing business where the company has much more at stake than it does selling business intelligence software.
If it were just selling virtual servers and storage on its Azure platform, Microsoft would likely never sniff market leader AWS in terms of users or revenue. But having good data products in place will boost subscription revenues, which count toward the cloud bottom line, and could give users an excuse to rent infrastructure from Microsoft, too.
Update: This post was updated at 10:15 a.m. to include additional information from a former Microsoft employee.
