How to deal with an author who worked on an analysis that never made it into the paper?
I had a situation like this come up once, where one person did an extensive analysis that turned out not to be particularly useful, so there was no point in including any details of it in the paper.  However, we did feel that having the analysis done did lead (indirectly) to a better understanding of what we were studying.  Moreover, we also felt that the person who did the analysis deserved some measure of credit in the final paper.  So we put a very short mention (one to three sentences) in the manuscript, just stating that we had done the analysis, but that it had not led to any useful conclusions, for such-and-such reasons.  Since the paper included this, it was unquestionably appropriate to include the person who had done the bulk of that analysis as an author.

I would suggest that you could do something similar, so your colleague could unambiguously be considered an author.