Cloud-based BI gains traction

by CXOtoday Staff    Jan 27, 2012

As enterprise users are frustrated by the deployment cycles, costs, complicated upgrade processes and IT infrastructures demanded by on-premises BI solutions, says Gartner

Nearly one third of organizations have already started to use or plan to use cloud or software-as-a-service (SaaS) offerings to boost their core business intelligence (BI) functions, according to Gartner.

According to a survey of 1,364 IT managers and business users of BI platforms in the fourth quarter of 2011, almost a third i.e. 27 percent already use or plan to use cloud/SaaS options to augment their BI capabilities for specific lines of business or subject areas in the next 12 months.

“Business users are often frustrated by the deployment cycles, costs, complicated upgrade processes and IT infrastructures demanded by on-premises BI solutions,” said James Richardson, Research Director at Gartner. “SaaS- and cloud-based BI is perceived as offering a quicker, potentially lower-cost and easier-to-deploy alternative, though this has yet to be proven. It is evident that, despite growing interest, the market is confused about what cloud/SaaS BI and analytics are and what they can deliver.”

The survey also found that only 17 percent of organizations have replaced or plan to replace parts of their core BI functions with cloud/SaaS offerings.

Gartner found that though buyers often think that SaaS is cheaper, but the reality is that this is unproven.

Gartner’s cost models show SaaS can be cheaper over the first five years, but not thereafter. The long-term benefits lay elsewhere, in terms of cash flow, reduced IT support costs, etc.

The firm said that the use of SaaS BI may lead to faster deployment, insight and value, particularly where IT is constrained by existing work and/or limited budget so that it cannot respond to demands for information and analysis as quickly as the business requires.

“If their operational business applications are in the cloud, organizations should consider pursuing cloud BI/analytics for those domains,” said Richardson. “However, they must assess risks on an ongoing basis and ensure their chosen cloud provider has appropriate business skills to provide a viable outcome. They must also ensure their BI strategy outlines how to ensure that data flows to and from these solutions in order not to become yet more silos of analysis.”