Even though the concept of Software as a Service (SaaS) has been embraced by almost all sectors; the same reception has yet to be seen for SaaS-based BI. CIOs are showing acceptance about SaaS-based business intelligence (BI) but management still remains unconvinced, says Sanjay Mehta, CEO of MAIA Intelligence.

One of the positives of on-demand BI is that it enables customers to quickly deploy one or more of the prime components of BI without significant IT involvement or the need to deploy and maintain an on-premises solution. In a report by Gartner, analysts opined that SaaS-based BI is attractive when enterprises require a comparison of internal key performance indicators (KPIs) or data with industry benchmarks. The Gartner report further stated that point analytics solutions that require specialized skill sets such as spend or risk analytics, which enterprises do not want to build, are additional areas of high suitability for this delivery model.

In spite of these ‘obvious’ benefits the question remains as to why adoption rates are not picking up. "We are seeing a lot of discussion on this front. People are talking about BI on-demand," said Mehta. But he also added that it is the management that is still apprehensive in most of the cases, even though the CIO may be open to the idea of on-demand BI.

Bhavish Sood, principal analyst (software markets) of Gartner agrees with this and says that a reason for this apprehension could be connectivity issues and security concerns. "In many Asian countries like India, telecom connectivity issues for accessing SaaS applications over the public Internet and costs associated with data transfer to the hosted environment are major growth inhibitors," he said.

Security is also a major concern — further compounded by the fact that many vendors do not have regional or country data centers to host these applications. This creates a problem in case of certain types of information and data, such as customer information or payment data that cannot reside outside the country as it may violate local laws.

In spite of these hurdles, Mehta expects the potential benefits to outweigh the risks, resulting in an increase in adoption in the coming years. Mehta is "hoping to see an increase in adoption in the next couple of years. Enterprises stand to gain a lot with a move to the cloud. For example, versioning issues will no longer exist."