Gartner identified three major drivers for the adoption of cloud/SaaS offerings for BI, analytics and performance management.
one-third of organizations either already use or plan to use cloud or
software-as-a-service (SaaS) offerings to augment their core business
intelligence (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
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 to ensure that data flows
to and from these solutions in order not to become yet more silos of analysis."
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.