Business Intelligence Software: Cloud Burst Ahead

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Business Intelligence software is changing rapidly as cloud computing offers greater flexibility. An industry observer reports:

The four CIOs sitting on the stage of the Microsoft Global High Tech Summit 2010 in Santa Clara earlier this month were all early adopters of various technologies, and had the scars to prove it. One noted that providing cloud-based access for an enterprise data warehouse was his biggest pain point these days.

Others on the panel said they were using cloud-based applications to provide broad access to enterprise data and analytics at low cost and without a lot of systems development. Indeed, a text messaging poll during the first keynote presentation found that 56% of the responding members of the audience said the primary benefit of cloud services was the lower cost of ownership, while 27% voted for the ability to extend access to corporate data to nontraditional workers.

The pioneers on the panel and elsewhere say the software-as-a-service (SaaS) aspect of cloud computing is rapidly creating a new wave of Business Intelligence software benefits and challenges. They cite the ability to quickly empower a large number of staff with information and insights about customers, products and internal operations at low cost as particularly compelling in the era of “new normal.”

“While there might be limitations to the amount of customization and analytics that some companies want, you can start doing things with relative ease and speed,” notes Howard Dresner, principal of Dresner Advisory Services and the former Gartner analyst who coined the phrase Business Intelligence.

With a SaaS approach to Business Intelligence, “You can have a basic BI application running in a day. Compare that to the six or more months required to develop and deploy on-premise solutions. Organizations can’t sustain long cycles anymore,” he says.

Or course, the downside of a SaaS approach to Business Intelligence is not trivial. Integrating either a cloud-based point solution or an entire suite with on-premise legacy systems is a major headache. System integrators should be looking at SaaS-enterprise integration as the best thing to happen to IT since Y2K, if you know what I mean.

All of the signs of the early adoption cycle promise to keep programmers and systems analysts busy for awhile. For example, Dresner notes that “so far I’m seeing SaaS and enterprise Business Intelligence purchased by different people in the organization. I can see where integration is problematic.”

It’s the same old story we’ve seen for two decades: maverick line-of-business managers with an immediate need for a low cost analytics solution. Rather than wait for the IT department to add it to the development priority list, the maverick LoB’s sign up with a hosted solution provider using their credit card.

Dresner acknowledges that the integration headache will be solved over time, like the concern over the security of data hosted in the cloud.

IT managers need to take a proactive approach to avoid the integration challenges. You should not think of cloud-based Business Intelligence software as just a fad, the Macarena dance of the week.

“CIOs need to focus on building an integration of data strategy that can enable the flow of data between on-premise and cloud computing-based on-demand environments,” recommends Mark Smith, CEO and EVP of research at Ventana Research, a leading consulting firm focused on the Business Intelligence universe. “CIOs should realize that the hosting of BI is not the difficult element –the integration and loading of data is the key element.”

The legacy Business Intelligence software vendors are stepping up to the plate to offer tools to ease the pain, though. “Many BI vendors can provide their software in a hosted environment, and others have built dedicated products for cloud computing and SaaS rental approaches,” Smith adds.

And, of course, a growing crowd of SaaS-based Business Intelligence software vendors are eager to help, too. In fact, Dresner predicts that this new crop of start-ups, typically founded by alumni of the existing market players, are creating the BI 3.0 era. In this view, the expensive and complex on-premise BI applications become legacy systems.

But that’s another story. If you’re interested in the CIO panel, an article summarizing the discussions will be posted soon at this web site: Microsoft Global High Tech Summit 2010.