Cloud-based business intelligence
(BI) and analytics provides an affordable and scalable option previously out of
reach for small and medium-sized businesses. The capability for firms to use
the solution provider’s infrastructure and expertise for all their BI,
analytics and reporting functions frees up the organization to focus on their key
competency and client service.
Decision makers are constantly wrestling
with the most effective ways to analyze real-time data quickly and effectively.
These escalating data demands are just one of the reasons there’s growing
market interest in cloud-based analytics. While Gartner forecasts the global BI
market to grow 9.7% this year, business analytics software-as-a-service (SaaS)
is expected to grow three times faster than the total business analytics software market,
according to Brian McDonough, research manager for IDC’s Business Analytics
Solutions research service.
Cloud-based BI and analytics
offer companies and business users multiple benefits. Businesses of all sizes
can leverage vast computing and storage resources in the cloud without having
to invest in expanding their existing IT footprints or IT support staffs. In
addition, cloud-based BI and analytics provide business leaders opportunities
to quickly gather and act on granular insights from a mix of structured and
Growing demand for these types
of capabilities is a key reason why BI cloud service providers increasingly
feature a portfolio of on-demand capabilities that enables any business user
with an Internet connection to quickly and easily create, publish, and share
customized business intelligence dashboards and advanced analytics applications
via the cloud.
The collection of tier-based
cloud services is designed to meet the needs of different types of users – from
independent business owners to executives for mid-size and enterprise
BI and analytics tools also free business leaders from having to rely on IT
staffers to generate reports or create dashboards for them, thus enabling
decision-makers to act quickly on fast-changing market conditions.
types of on-the-fly capabilities place greater power in the hands of
organizational leaders to analyze their sales, operations, marketing campaigns,
or trends involving individual line-item expenses while freeing up IT resources
to focus on other activities.
The accessibility of
cloud-based BI and analytics also helps foster greater collaboration and teamwork
among decision makers, including those who might be geographically separated.
These types of capabilities enable business users to easily share ideas and
insights either privately or publicly with one another, customers, prospects
and other business partners.
The combination of these
features provides line-of-business users the power to quickly and easily make
informed business decisions across all levels of the organization. That’s
absolutely critical given the pace of change in the current dynamic global
Why CIOs are quickly prioritizing analytics, cloud and mobile
Gartner Market Report Insights, Arcaris and Jeffrey (2012), when priorities are
analyzed across eight key industries, patterns emerge showing how the
communications, media and services (CMS) and manufacturing industries have the
highest immediate growth potential for mobility (Next 2 years). In particular Big Data/BI, Financial Services
is projected to be the fastest-developing industry and in Cloud computing, CMS and
this and related data, a profile of early adopter enterprises emerges. These are companies who are based on
knowledge-intensive business models, have created and excel at running virtual
organization structures, rely on mobility to connect with and build
relationships with customers, and have deep analytics expertise. In short, their business models take the best
of what mobility, Big Data/BI and cloud computing has to offer and align it to
their strategic plans and programs.
Data discovery, SaaS lead BI market review
Kern (2013), in 2011 the BI market registered some
of its largest gains, with a 17 percent boost in year-over-year spending based
on improved economic conditions and the strength of emerging markets, like
Brazil and India. Gartner Research VP Dan Sommer, in a release on the BI market
findings, wrote that "data discovery became a mainstream architecture in 2012
and the vendors that built on this paradigm gained market share, while most
semantically layered BI platforms grew in the single digits, at best,” Sommer
wrote. "Cloud-based buying is also starting to make an imprint on the radar,
showing substantial growth, although cloud still accounts for a smaller portion
of the BI market compared with other application markets."
Finance directors see value of business intelligence
According to Twentyman (2013), almost three-quarters of financial
professionals say they struggle to collect data from multiple sources and
perform the analyses required to answer questions about corporate financial
performance, according to a survey by data warehousing company
Teradata. This, they say, limits their visibility into the
business dynamics that affect financial results and delays actions that might
improve corporate performance.
It is no surprise, then, that the finance
function has been leading the adoption of business intelligence
Major drivers for the adoption of cloud/SaaS
offerings for BI, analytics and performance management identified by Gartner
N. (2012) reports that nearly one-third of organizations either already use or
plan to use cloud or software-as-a-service (SaaS) offerings to augment their
core BI functions, according to a report from IT research firm Gartner.
According to a survey of 1,364 IT managers and business users of BI platforms
in the fourth quarter of 2011, only 17 percent of organizations have replaced
or plan to replace parts of their core BI functions with cloud or SaaS
offerings. However, almost a third (27 percent) already use or plan to use
cloud or SaaS options to augment their BI capabilities for specific lines of
business or subject areas in the next 12 months.
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's evident
that, despite growing interest, the market is confused about what cloud/SaaS BI
and analytics are and what they can deliver."
has identified three major drivers for the adoption of cloud/SaaS offerings for
BI, analytics and performance management: time to value, cost concerns and lack
of available expertise. The report said 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.
company also noted the cost dynamic differs between on-premises and SaaS
models. Software purchased as a service can usually be expensed, rather than
capitalized, on the balance sheet. 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
lie elsewhere-in terms of cash flow and reduced IT support costs. Meanwhile, SaaS
analytic applications offer prebuilt intellectual property that can help firms
work around a lack of the skills needed to build their own analytic solutions.
report also projected that instead of disrupting the enterprise BI platform and
corporate performance management suite market, a more likely scenario is that
SaaS and cloud-based offerings will tap into new opportunities, such as with
small to medium-size businesses (SMBs) that have yet to invest in BI, or by
offering domain-specific analytics.
their operational business applications are in the cloud, organizations should
consider pursuing cloud BI/analytics for those domains," Richardson said.
"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 data flows to and
from these solutions in order not to become yet more silos of analysis.”
Arcaris, C. and Roster, J. 2012. "The
Gartner Report Market Insight: Technology Opens Up Opportunities in SMB
2012. "Cloud, SaaS Offerings Bolster Business Intelligence
Market: Gartner” Available from: http://www.eweek.com/c/a/Cloud-Computing/Cloud-SaaS-Offerings-Bolster-Business-Intelligence-Market-Gartner-144133/.
Kern. J., 2013, Data Discovery,
SaaS Lead BI Market Review. Available from : http://www.information-management.com/news/data-discovery-saas-lead-bi-market-review-10024484-1.html.
TIBCO Spotfire's Business
Intelligence Blog. Trends and Outliers. 2011. "The Power of Cloud-based BI and
Analytics” Available from: http://spotfire.tibco.com/blog/?p=8323#more-8323
Twentyman, J. 2013. "Finance directors see value
of business intelligence”. Available from: http://www.computerweekly.com/feature/Finance-directors-see-value-of-business-intelligence.
Ravi Durairaj is Managing Director of Censof-North America.
Censof (Century Software) is a leading provider of reporting and business
analytics to the accounting industry. To learn more, please visit www.censofinc.com or send Censof a message.