Deflating the Cloud BI Hype Balloon

Business intelligence delivered via the cloud is showing early signs of maturity, with integration challenges (and IT opportunities) rising. Reports of the end of on-premise BI may be premature.

With apologies to Mark Twain, the reports of the upcoming demise of most enterprise IT jobs due to cloud computing is greatly exaggerated. New survey data and some discussions with leading analysts lead to a conclusion that public and private cloud will add new layers to the traditional IT architectural stack at large enterprises, and therefore new challenges.

Indeed, the rising interest in cloud-based business intelligence apps that provide marketing, sales, HR and even the finance department with what appears to be a fast and inexpensive way to use analytics to solve business problems is a job-creating gift for many IT pros. It turns out that the interconnection of public, private and on premise systems is a bit of a hair ball, to borrow Sun Microsystems’ co-founder Scott McNealy’s famous phrase.

The new report, “Cloud Computing and Business Intelligence,” from Dresner Advisory Services is based on an extensive global survey of more than 500 business and IT professionals. The report says 23% of the respondents currently use cloud BI, with another 38% thinking about it. And roughly four out of 10 say “No way!”

Howard Dresner, a pioneer in the BI world and the author of the report, detects a modest decline in cloud BI’s perceived importance, relative to prior years.

“The urgency to adopt cloud has diminished,” he told me in an interview. “The hype is trailing off and the reality is picking up.” 

Indeed, the mix of types of cloud implementations are sowing the seeds of future IT challenges and opportunities.  Private cloud continues to dominate among cloud infrastructure choices.  Public cloud continues to lag, due to the continuing concerns about security, privacy, vendor viability and various control issues. Only around 10% are using the hybrid approach now, but another 20%+ are considering it.

Interconnecting on-premises data and applications with relevant cloud systems has been, is and will be a major challenge. Over the past few years the initial integration challenge was linking a cloud system like Salesforce to a company’s internal customer data, to provide sales and marketing people with a holistic view of a customer’s history and potential. Nowadays the challenge is three fold—integrating the various cloud tools with each other as well as with the various internal systems, according to the new report.

In large measure the integration challenges were due to benign neglect (or worse) on the part of IT and the maverick purchases by the operating units. For too many years, sales, marketing, HR and finance professionals would be frustrated by the unresponsiveness of IT, and the rise of easy to buy and use cloud-based BI apps proved irresistible. 

The growth in cloud BI adoptions by function can be tracked by answering the question, “Who has been underserved by IT?” Dresner notes.  “Most people are using cloud BI in anger, due to frustration over IT shortcomings. HR moved into cloud because it was the most underserved function by IT.  Other departments chose their own path because IT couldn’t serve them.  And, increasingly, these functions have the budget for cloud BI.”

The best way for IT to prevail in this environment is to promote the hybrid approach. Dresner says he is surprised by the relatively small number of hybrid infrastructures reported by survey respondents; he suggests there is some misperceptions about what is a hybrid implementation. 

“Hybrid is something they ought to embrace,” Dresner notes.  “Some things should not be in the cloud, while some things shouldn’t be on premise. For example, a supplier and customer portal are ideal candidates for the cloud. Of course, it needs to be connected to the on-premises apps.”

IT organizations should offer to “strike a balance between what is on premise and what is in the cloud,” Dresner adds. “A lot of organizations have not yet gotten their heads around that, though.”

To effectively strike a balance between external and internal apps requires more interconnections than companies currently have.  In fact, demand for better tools to facilitate seamless data and apps functionality is strong and rising quickly.  More than 70% said connectors between cloud and on-premises BI  apps was critical or very important requirement, while half said connectors to link various cloud apps were either critical or very important.  And this table shows their growing importance – the one-year change, in percentage points, in the top cloud BI requirements of 252 survey respondents:

Cloud application connections

12 pps

Connectors from cloud to on-premises applications and data


Cloud database connectors


RESTful/web services APIs

8 pps

Dresner, who was a Gartner fellow and has 34 years in the IT industry, takes a longer-term perspective about the integration challenges.  “We have to solve the same problems we solved on premise,” he explains, and then adds that these problems “won’t persist forever in the enterprise, but they will take a while to solve.”

He forecasts that more new vendors with proprietary solutions to the integration challenges will appear on the scene. Then there will be the push to consolidate those solutions.

And then, of course, the next new technology wave will need to be added to the existing stack. And so it goes….

For more information about the new Dresner study, please visit this web site CloudBIReport.

Photo courtesy of Shutterstock.

Tags: cloud computing, business intelligence, BI, big data

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