Microsoft Monday said it has agreed to acquire ProClarity as a way to continue to develop its portfolio of business intelligence (BI) software.

The terms of the deal, which is expected to close in early May, are not being disclosed, said Chris Caren, a Microsoft Office general manager.

ProClarity, which has business analysis and visualization software for culling information from Microsoft SQL Server and exposing it to business users, is a privately held Microsoft partner in Boise, Idaho. The acquisition fits into Microsoft’s goal to be a prominent player in the BI market against competitors such as Business Objects SA and Cognos, Caren said.

Microsoft plans to use ProClarity’s technologies in conjunction with its SQL Server 2005, Office Business Scorecard Manager 2005, Office Excel and Office SharePoint Portal Server products. ProClarity’s BI software is built to be deployed exclusively on SQL Server, allowing users to tap into database information to view business metrics and other analytical information about business performance, Caren said.

Users also can query SQL Server for specific information using ProClarity’s software, and that information can come to the surface through Scorecard Manager, Excel or SharePoint Portal.

Keith Gile, a principal analyst with Forrester Research, said the acquisition "fills a gaping hole" for Microsoft and positions it more competitively as a BI vendor.

Gile said Microsoft’s investment in BI is fairly new, and there has not been a link between the back-end data mining and reporting services in the SQL Server database and the front-end interfaces business customers use. The acquisition of ProClarity changes that, he said.

"Office is a great consumer tool for BI, but it’s not a great producer tool—it’s not a mechanism for building, but surfacing the results," he said. "ProClarity is a good tool to [produce BI results]. It’s strong at building queries, dashboards and analysis on top of the Microsoft platform."

In addition to adding heft to Microsoft’s BI technology portfolio, ProClarity also bolsters its sales team in this market, Caren said. "A key reason we acquired ProClarity was to accelerate field sales build-out," he said.

Over the past few years, Microsoft has increased its emphasis on having a comprehensive BI portfolio. In particular, Microsoft is promoting the next release of its Office suite, Office 2007, as not only a package for productivity but also BI in an effort to encourage customers to upgrade. Office is the front-end interface to Microsoft’s BI strategy, allowing users to see the results of business information extracted from SQL Server.