BI in Public Cloud vs. on-premise BI
Posted by Andrei Pandre under Cloud
, Guest Posts
For this weekend I got 2 guest bloggers (one today and second tomorrow) sharing their thoughts about Cloud Services for BI and DV. I myself published recently a few articles about this topic, for example here: https://apandre.wordpress.com/2013/08/28/visualization-as-a-service/ and here:
https://apandre.wordpress.com/2013/12/14/spotfire-cloud-pricing/ . My opinions can be different from Guest Bloggers (see my comment below this article). You can find many providers of DV and BI Cloud Services, including Spotfire Cloud, Tableau Online, GoodData, Microstrategy Cloud, Bime, Yellofin, BellaDati, SpreadsheetWEB etc.
Let me introduce my 1st guest blogger for this weekend: Mark Flaherty is Chief Marketing Officer at InetSoft Technology, a BI (Business Intelligence) software provider founded in 1996, headquartered in Piscataway, New Jersey with over 150 employees worldwide. InetSoft’s flagship BI application Style Intelligence enables self-service BI spanning dashboarding, reporting and visual analysis for enterprises and technology providers. The server-based application includes a data mashup engine for combining data from almost any data source and browser-based design tools that power users and developers can use to quickly create interactive DV (Data Visualizations).
Are public BI cloud services really going to overtake the traditional on-premise deployment of BI tools?
(Author: Mark Flaherty. Text below contains Mark’s opinions and they can be different from opinions expressed on this blog).
It’s been six years since public BI cloud services came to be. Originally termed SaaS BI, public BI cloud services refers to commercial service providers who host a BI application in the public cloud that accesses corporate data housed in the corporate private cloud and/or other application providers’ networks. As recently as last month, an industry report from TechNavio said, “the traditional on-premise deployment of BI tools is slowly being taken over by single and multi-tenant hosted SaaS.” I have a feeling this is another one of those projections that copies a historical growth rate forward for the next five years. If you do that with any new offering that starts from zero, you will always project it to dominate a marketplace, right?
I thought it would be interesting to discuss why I think this won’t happen.
In general, there is one legitimate driving force for why companies look to cloud solutions that helps drive the demand for cloud BI services specifically: outsourcing of IT. The types of companies for whom this makes the most sense are small businesses. They have little or no IT staff to set up and support enterprise software, and they also have limited cap-ex budgets so software rentals fit their cash flow structure better. While this is where most of the success for cloud BI has happened, this is only a market segment opportunity. By no means do small companies dominate the IT marketplace.
Another factor for turning to public cloud solutions is expediency. Even at large companies where there is budget for software purchases, the Business sometimes becomes frustrated with the responsiveness of internal IT, and they look outside for a faster solution. This makes sense for domain-specific cases where there is a somewhat narrow scope of need, and the application and the data are self-contained. Salesforce.com is the poster child for this case, where it can quickly be set up as a CRM for a sales team. Indeed the fast success of salesforce.com is a big reason why people think cloud solutions will take off in every domain.
But business intelligence is different. A BI tool is meant to span multiple information areas, from finance to sales to support and more. This is where it gets complicated for mid-sized and global enterprises. The expediency factor is nullified because the data that business users want to access with their cloud BI tool is controlled by IT, so they need to be involved. Depending on the organization’s policies and politics, this can either slow down such a move or kill it.
The very valid reason why enterprise IT would kill the idea for a public cloud BI solution is why ultimately I think public BI cloud services has such a limited opportunity in the overall market. One of IT’s responsibilities is ensuring data security, and they will rightly point out the security risks of opening access to sensitive corporate data to a 3rd party. It’s one thing to trust a vendor with one set of data like website visitor traffic, but trusting them with all of a company’s financial and customer data is where almost all companies will draw the line. This is a concern I don’t see ever going away.
What are some pieces of evidence that public BI cloud services have a limited market opportunity? When BI cloud services first came onto the scene, all of the big BI vendors dabbled in it. Now many no longer champion these hosted offerings, or they have shuttered or demoted them. IBM’s Cognos Express is now only an on-premise option. SAP BusinessObjects BI OnDemand can’t be found from SAP’s main site, but has its own micro site. Tibco’s Spotfire Cloud and Tableau Software’s Tableau Online are two exceptions among the better known BI providers that are still prominently marketed. However, Tibco positions this option for small businesses and workgroups and omits certain functionality.
Our company, too, experimented with a public BI cloud offering years ago. It was first targeted at salesforce.com customers who would want to mash up their CRM data with other enterprise-housed data. We found mostly small, budget challenged companies in their customer base, and the few large enterprises that we found balked at the idea, asking instead, for our software to be installed on-premise where they would connect to any cloud-hosted data on their own. Today the only remaining cloud offering of ours is a free visualization service called Visualize Free which is similar to Tableau Public or IBM’s Many Eyes.
Another observation to make, while there have been a handful of pure-play cloud BI vendors, one named “Lucidera,” came and went quite quickly. Birst is one that seems to have got a successful formula.
In summary, yes, there is a place for public BI cloud services in the small business market, but no, it’s not going to overtake traditional on-premise BI.