SaaS BI popular as use case for KPIs

Bhavish Sood, Research Director at Gartner

How is the cloud-based BI and Analytics model perceivedby the industry?

Although SaaS-based BI is an emerging market, a considerable enhancement has occurred in the number of offerings and the acceptance of clients, owing to the pricing and delivery model. However, with the exception of the SAP Business Objects On Demand products, none of the major BI platform vendors have a significant presence with BI as a service offering in the market, nor are they expected to, in the near future. Early adopters have been in the mid-market and at the departmental level of large enterprises, but the size and sophistication of implementation have just started expanding to become enterprise focused initiatives. Despite the increasing maturity of SaaS provider offerings, in future, SaaS BI solution providers will compete by leveraging cloud service infrastructure from multiple providers such as Amazon and Joyent, rather than building it in-house.

My observation is that there is very little uptake of core BI reporting on the Cloud. This may possibly be due to competition from open source and data discovery solutions. The second aspect is that verticalised analytics solutions and CRM analytics adoption is maturing and growing client interest.

How is the cloud model being used to map BI and Analytics usage in an enterprise?

As per our understanding, Web analytics is the most mature SaaS BI solution offering. Almost the entire Web analytics market is delivered as SaaS.

• SaaS BI is most attractive as a use case when enterprises require a comparison of internal key performance indicators (KPIs) or data with industry benchmarks.
• Point analytics solutions that require specialised skill sets that enterprises do not want to build, such as spend analytics, are an additional area of high suitability for this delivery model.
• The other challenge would be telecom connectivity issues for accessing SaaS applications over public Internet in many regions; costs associated with data transfer to the hosted environment are major growth inhibitors.
• Security continues to be another major inhibitor for clients migrating to this delivery model.
• Increasing push by businesses to gain insights into the health of their businesses, rather than worry about technical issues, is forcing many CIOs to look at this alternate delivery model which requires no IT intervention.
• Key vertical opportunities for vendors are increasing as they encounter complex merger and acquisition IT integration issues as well as those requiring point solutions for reporting and analytics (such as warranty analytics for an automotive vendor).
• SaaS applications with architectures that allow the flexibility to move the data and reporting behind the corporate firewall when required will have larger resonance with clients.

What kind of strategy is being used to buy in the line of business regarding deployment of cloud-based BI and Analytics within the organisation?

At the end of the day, SaaS is just a delivery model. It provides business users with the opportunity to focus on the use and application of information while also providing greater flexibility to IT staff. As a result, the staff can focus on the outcomes of the BI initiatives, rather than worry about underlying application and technology issues.

The following factors are driving SaaS BI adoption:

• Overall market momentum on SaaS because of the current economic situation where clients want to avoid making capital expenditures
• Low barrier to entry; improves focus on impact of BI and thus promotes faster ROI
• Availability of high-quality (best-of-breed or stack origin) solutions at low cost
• Lower application development costs due to the outsourced nature of work
• Faster procurement and ease in capital expenditure
• Financial flexibility due to the pay-as-you-go model

What are the pain points that IT heads face regarding adopting the Cloud model for deploying BI and Analytics?

Despite the availability of many service offerings, the following factors may slow broader adoption:

a) Migration costs when moving current infrastructure to a SaaS BI offering and vice versa

b) Little understanding of the total outlay for the application due to the nature of various pricing models of SaaS BI offerings (for example per user, per year or per report)

c) Perception regarding technical and security risks for mission-critical deployments

d) The perception among the IT heads are that the faster deployment connotes lower quality by overlooking best practices

e) Customers rallying around tried and tested vendors and delivery model perceived as safe during uncertain times.

f) Cost and risk of integrating with on-premises information infrastructure

What do you think customers should expect and not expect from cloud based BI and Analytics?

There is a conflict between the compelling value proposition that SaaS BI provides (the ability to create BI solutions in a scalable manner without an upfront investment) and the two primary barriers to SaaS-based BI: Trusting data to a third party and overcoming, and the inertia involved with moving to a new architecture.

Nike Tiempo Legend VI FG