Microsoft plans to clarify its business intelligence strategy with the unveiling of Microsoft Office PerformancePoint Server 2007, a new addition to its Office lineup, on Tuesday.

PerformancePoint Server combines a business analysis engine the company acquired with ProClarity, with an Excel front end and SQL Server analysis and reporting features to provide business performance management, said Michael Smith, director of Microsoft’s Office business applications group. The new software is expected to ship in the second quarter of 2007.

Microsoft said in April that it was buying ProClarity, which develops business analysis and visualization software for SQL Server databases.

PerformancePoint signals the end of Microsoft Business Scorecard Manager, an analysis tool that will be folded into the new product, Smith said.

Microsoft has been hard at work on a suite of business intelligence products that will run on top of its SQL Server 2005 product, which includes analysis and reporting services the company considers its core BI platform. But Microsoft is also tailoring Office to compete with BI suites from competitors such as Business Objects, Cognos, and Hyperion, Smith said.

“The [BI] market is maturing the point and getting big enough that leaving all of this higher-value stuff to third parties isn’t acceptable anymore,” said Andrew Brust, chief of new technology at consultancy twentysix New York.

Brust said that until now Microsoft has been putting its BI strategy together in a piecemeal fashion. The company needs to explain how those pieces fit in to build a full set of BI applications that are comparable to what competitors now have.

ProClarity’s software is known for having a strong front end for presenting BI analysis results. PerformancePoint won’t showcase that aspect, but Microsoft plans to add it to future versions of Office, Smith said.