4 Questions to Ask Before You Define Your Cloud BI Strategy

These days, when it comes to enterprise software, it seems that it is all about the cloud. Some software applications such as Salesforce, Marketo, and Workday, have made quite a name for themselves in this space. Can Business Intelligence follow the same path to success? Does it make sense to house your BI in the cloud? I believe that it depends. Let’s explore why.

There are four criteria that impact the decision for a cloud vs. on-premise BI strategy.  Let’s take a look at how they affect your approach.

Question 1: Where is the data located?

Your BI Strategy should vary depending on the location of data.  If your data is distributed, some data may already be in the cloud, e.g. web data / clickstreams; and some on-premise, such as corporate data. For real-time or near real-time analytics, you need to deploy your BI as close to the source as possible. For example, when analyzing supply chain data out of an on-premise SAP system, where your database, application and infrastructure are all sitting on-premise, it is expensive and frankly impractical to move the data to the cloud before you start analyzing it.

Your data can also be geographically distributed. Unless your cloud infrastructure is co-located with your data geo zones, your BI experience can suffer from data latency and long refresh intervals.

Question 2: What are the security levels of data?

It’s important to acknowledge that data security levels are different in the cloud. You may not be able to put all your analytics outside of the company firewall. According to Cisco’s 2012 Global Cloud Networking survey, 72% of respondents cited data protection security as the top obstacle to a successful implementation of cloud services.

Question 3: What are the choice preferences of your users?

Customer preference is extremely important today. The balance of power has shifted, and users and customers are now the ones who decide whether an on-premise or a cloud deployment is suitable for them. What’s more, each customer’s maturity model is different. As an application provider or business process automation provider, you need to cater to your individual customers’ business needs.

Question 4: What operational SLAs does your Cloud BI vendor oblige you to?

Your operational SLAs can depend on cloud infrastructure providers, obliging you to service quality levels different from what you need. Pure cloud BI vendors provide their BI software over the public Internet through a utility pricing and delivery scheme. As much as this model provides an attractive alternative when resources are limited, it’s not for everyone. In most cases, the SaaS BI vendor depends on IaaS vendors (such as Amazon, Savvis, OpSource, etc.) for storage, hardware, and networks. As a result, the SaaS BI vendors’ operational processes have to align with the infrastructure vendors’ for housing, running, and backup/recovery of the BI software. Depending on your BI strategy, these nested and complex SLAs may or may not be the right choice.

Large enterprises, or even mid-market companies inspired by growth, typically develop an IT strategy that is provider-agnostic and has the flexibility to be hosted on-premise or in the in the cloud.   This strategy helps companies avoid lock-in and inflexibility down the road.

As cloud technology remains one of the hottest trends in IT today, it is important to assess whether cloud is the right choice for BI. The reality is that it depends. The center of gravity for BI is still on premise; however, it will move to the cloud over time mostly through the embedded BI capabilities of enterprise SaaS applications. Successful organizations will be the ones that can navigate the boundary between the two strategies and provide greater flexibility and choice by offering a product that can be deployed on-premise, in the cloud, or a hybrid of both.

What is your Business Intelligence Cloud strategy?

— Farnaz Erfan, Product Marketing, Pentaho

This blog was originally posted on Smart Data Collective.

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My Reflections on the Wisdom of the Crowds Business Intelligence Market Study

I recently came across a very interesting study that has been published by Dresner Advisory Services. The Business Intelligent market study titled, “Wisdom of the Crowds”, is written by Howard Dresner, one of the foremost thought leaders in the BI market. This in-depth research has used a survey tactic to gather the wisdom of 457 BI users (quite a crowd!) on 32 essential metrics for choosing a BI technology. The results are astonishing.

Among the many trends two were the most interesting to me:

1. Today, smaller BI deployments dominate across all geographies and all industries.
2. Smaller BI deployments have started to take off in the last 2 years or so and are growing in the expense of large deployments that were once popular 5 to 15 years ago.

This is a huge market shift. 1,000+ user base deployments are no longer ideal or even desired. They have been replaced by smaller deployments for individual organizations, departments, and line of businesses.

While this is no surprise due to the economic conditions that has forced companies to cut back in their capital expenditure, including huge licensing costs just to entitle “every” user to the software and tools in hand, plus money spent on training and hiring skilled users, what has truly made this “shift” possible is the opportunity that open source BI has presented to these clients.

In my opinion, Open Source BI provides this opportunity in two ways:

1. Lower cost and easier to deploy BI software is now available. Notice that I am not just talking about the low cost here. Yes, Open Source BI has been a disruptive technology in the past couple of decades. Newer to the BI world, Open Source bears no acquisition cost for the software. Instead it offers a subscription model for support, which has made it the most attractive alternative for most clients. All the required functionality with only 10% of the cost! What else is new?!

Here, however, my emphasis is on the “easier to deploy” factor. What in the past took a symphony of data modelers, BI developers, ETL developers, data analysts, data architects, data warehouse managers, and DBAs, and a 12 month implementation cycle, is now done “only by a few and only in a few weeks”.

What does this mean for smaller organizations or even departments within larger organizations? It means that now they are able to invest in BI. Something that was not viable a few years ago. They not only don’t have to pay high dollars for BI tools, but also don’t need an exhaustive list of skills, consulting, and expertise to get going.

Dresner’s report shows exactly this. More and more smaller deployments are becoming popular in the last couple of years and are replacing the large ones that were on most corporate priority lists 5-10 years ago.

2. The second reason for this market shift is due to the connection that emerging technologies (such as open source) have made to the line of business owners. Business users have found a way to “free” themselves from IT latency. There is no question that you need your technical staff to initially set up the BI infrastructure and build the first round of reports and analysis, but that shouldn’t mean that every time you want add a dimension to your calculations, or measure something slightly different, you would have to go in a waiting list queue behind several other requests and get an answer 3-4 weeks later. Business users now realize that they can take control, and find the answers for themselves — at least in most cases.

Open Source BI has emerged to enable these folks with tools that let them manage changes in their business processes a lot faster. Dresner’s report is an evident to this fact. The study shows that business users are the most likely to chose emerging technologies over BI tools from the Titans (IBM, SAP, Oracle, and Microsoft) and the BI Pure Plays (Actuate, MicroStrategy).

I would encourage you to download and study this report further. You will be intrigued!

To conclude my points, I’d like to point out a chart from the 2010 Wisdom of Crowds Market Study (The 2011 study is underway). It shows the life cycle of all BI vendors.
Several vendors matured 2 to 5 years ago. They saw the most deployments and new customer acquisitions in that time frame. But since then, their deployments have declined. Among these vendors are SAP Business Objects, Oracle, MicroSoft, IBM Cognos, and Actuate. With cobbled together tools from different acquisitions that are not integrated and require deep technical skills and long deployment cycles, not to mention the huge software acquisition costs for clients, there is no wonder to this trend. These tools are anything but suitable for small, agile, and high-value projects.