BI In The Cloud: Separating Facts From Fiction

“… and they lived happily ever after.” This is the typical ending of most Hollywood movies, which is why I am not a big fan. I much prefer European or independent movies that leave it up to the viewer to draw their own conclusions. It’s just so much more realistic. Keep this in mind, please, as you read this blog, because its only purpose is to present my point of view on what’s happening in the cloud BI market, not to predict where it’s going. I’ll leave that up to your comments — just like your own thoughts and feelings after a good, thoughtful European or indie movie.

Market definition

First of all, let’s define the market. Unfortunately, the terms SaaS and cloud are often used synonymously and therefore, alas, incorrectly.

  • SaaS is just a licensing structure. Many vendors (open source, for example) offer SaaS software subscription models, which has nothing to do with cloud-based hosting.
  • Cloud, in my humble opinion, is all about multitenant software hosted on public or private clouds. It’s not about cloud hosting of traditional software innately architected for single tenancy.

Therefore, I define SaaS cloud-based BI as:

Business intelligence platforms and solutions specifically designed and architected for multitenant hosting in public/private clouds. These platforms and solutions are often licensed on a subscription (SaaS) basis because the nature of their architecture and purpose often do not warrant capital investments and perpetual licenses.

Now, if you agree with that definition (if you don’t, you know where to find me), let’s automatically exclude the following categories of vendors and products from the way we just defined the SaaS cloud-based BI market:

  • Earlier-generation BI software architected for single tenancy that just happens to be hosted in the cloud.
  • Earlier-generation BI software that is being modified for multitenancy until it reaches 100% multitenant capabilities. Multitenant administration and security, plus the ease of procuring, deploying, and managing multiple client instances are often the key differentiators between earlier-gen BI software hosted in the cloud and native cloud BI platforms

Pros/Cons

If we stay within the parameters of the above definition and exclusions, then I do see the following reasons and benefits of SaaS cloud-based BI:

  • No or low (in the case of customization) initial investment. I was planning to say something about overall lower TCO, but one of the cloud SaaS BI companies just made me aware of a $300,000 annual subscription deal they are about to close, so over the long term that is not anything to sneeze at and may in some cases leapfrog the TCO of traditional on-premises BI platforms and solutions.
  • Opex versus capex.
  • Elasticity.
  • Less reliance on internal IT resources.

These benefits don’t come without a cost; alas, there’s nothing like free lunch in this life. Therefore, SaaS cloud BI platforms and solutions are usually:

  • Less mature
  • Have significantly less functionality (today, but that’s about to change)
  • More difficult to customize (not just adding columns, but changing the look and feel, process flow, app logic, etc. This is also changing, slowly but surely)

… than their older and bigger on-premises BI cousins.

Recommendations

 So, when would I recommend considering SaaS cloud BI? I’m glad you asked. I’d recommend it when:

  • You don’t need all the bells and whistles of more mature on-premise BI platforms and solutions.
  • Your IT resources just can’t deliver.
  • You require lots of elasticity (in terms of volume, usage, and price).
  • You don’t need ironclad SLAs (applicable only to public clouds where the infrastructure is beyond the vendors’ control). Some of the folks I interviewed did push back in this point, saying that public cloud performance is often superior to on-premises/private clouds. OK, I am not a subject-matter expert in this area, but I have to admit that these public cloud BI SaaS SLA stats do look impressive.
  • You are not dependent on disconnected/offline/full client architecture.
  • You don’t think you’ll outgrow the cloud software and would need to bring the platform/solution in house in the near future.

If it sounds like you are in the right place and time for SaaS cloud BI, you have five categories of options:

  • Traditional BI vendors with SaaS cloud-BI offerings. These are typically separate platforms/SKUs, not part of these vendors’ main offerings, which means different functionality and a different GUI. Examples include SAP BusinessObjects and Tibco Spotfire. These are SaaS cloud BI platforms. Make sure you differentiate from offerings from other BI vendors like Actuate, Information Builders, and SAS which include cloud-based, domain-specific SaaS BI solutions.
  • Native cloud BI platforms, such as Gooddata, Birst, Bime Wearecloud, Panorama Software for Google apps, and Zoho.
  • Native cloud BI domain-specific solutions such as Deloitte Oco and Rosslyn Analytics.
  • Native cloud BI platforms which are used to build custom solutions, like Alteryx and Pivotlink.
  • Native cloud-based data warehouse platforms like 1010Data and Kognitio.

And finally, please don’t misinterpret the tone of this article as negative toward SaaS cloud BI — just the opposite. I firmly believe that 50% to 80% of all BI applications fall or can fall under the above criteria and therefore SaaS cloud BI will be a huge market (shoot, I just broke my own promise not to make a prediction, but I couldn’t resist!).