Microsoft Crowds Business Intelligence Space

The good news for pure-play business intelligence vendors is that demand for their products is rising. The bad news? Microsoft(MSFT Quote) and other giant software companies, anxious to expand their offerings, are aggressively moving into the sector.

Although some analysts see the trend as old news, the market doesn't. On Tuesday, for example, a Goldman Sachs note exploring an upcoming Microsoft business intelligence announcement whacked much of the entire sector. Hit hardest were MicroStrategy(MSTR Quote), off $3.93, or 6.6%, to $55.67, and Cognos(COGN Quote) -- which reports fourth-quarter earnings Thursday. Cognos lost $2.47, or 5.6%, to close at $41.08. Cognos regained some ground during Wednesday's rally, but MicroStrategy lost another 70 cents.

"Microsoft's foray into the BI (business intelligence) market is not new, however, we expect that Microsoft is likely to become an increasingly formidable competitor in BI, particularly with small and medium-size business customers," wrote Goldman analyst Rick Sherlund in a note to clients. ...