Business Intelligence In The Cloud

BI In The Cloud

The mid-tier and SME Business Intelligence (BI) industry is responding to a shift towards Cloud-based applications which are migrating from the centralised platform to individual vendor applications. However, this has created a divide between enterprise-scale and midmarket customers.

Most enterprises have legacy on-premise BI platforms and look to extend rather than invest in new off-premise solutions, so the move towards Cloud-based solutions will be slower. As early adopters of Software as a Service (SaaS) and the Cloud, smaller organisations have turned to web-based applications due to their cost effectiveness. However, how will this diversification affect the market and the long-term foundations of the BI space?

The Impact Of BI In The Cloud

Enterprise migration to the Cloud appears to be much slower than the midmarket sector. The often expensive and complex IT infrastructure inherent within larger organisations have been developed by in-house IT teams making it natural for this approach to continue when there is a vested interest in maintaining that infrastructure.

Also, SaaS and Cloud solutions have typically been point applications, whereas a corporate data warehouse would generally be considered a strategic asset and unsuitable for deployment externally. Finally, Cloud-based systems may be less suitable as platforms for the secure integration of large volumes of data from across the organisation, since they emphasise point functionality and typically provide only rudimentary integration capability through a basic API.

Conversely, midmarket organisations, who have largely been unable to take advantage of business intelligence tools due to the heavy upfront costs and the lack of internal IT capabilities to manage them, are now adopting Cloud-based BI systems much faster. As these businesses tend already to operate Cloud-based systems, Cloud-based BI is more easily integrated, making it a much more attractive and cost-effective option.

Can Cloud BI Overturn The Disappointment In Enterprise BI?

Business leaders are demanding more from their data; in order to compete, they need insight upon which they can make critical decisions. Historically, legacy systems have failed to meet expectations with their high financial, time and resource costs alongside the specialist skillset required to effectively implement.

There are a number of ways in which Cloud-based systems can improve the experience; where a fully functional BI platform is provided alongside a SaaS or hosted CRM, finance or other package, the end-user may receive rudimentary BI capability.

This is offset by the ease of procurement and deployment, alongside the maintainability of the solution since the BI component will always correctly reflect updates to the core SaaS application. Most would consider the advantages to outweigh the limitations.

From Technology To Business-Driven BI

More recently, the approach to BI has shifted from a “technology-first” focus, in favour of end-user centred solutions that can deliver targeted decision support, which may explain why the overall spend on enterprise BI platforms has slowed in recent years.

While enterprises have battled with underperforming legacy BI systems, the midmarket sector has been plagued with insufficient IT skills and resources, preventing them from building a business based on intelligence. Managers and owners were finding it increasingly difficult to manipulate and extract their data for meaningful analysis, resulting in a lack of critical insight required for a strong, competitive outlook.

Removing the need for IT teams to implement, and with improvements in bandwidth, the commodity server market and network storage systems, the Cloud has opened up a new era of BI for organisations of all sizes.

Is Migration To Cloud Services Likely?

As many larger organisations have significant investments into complex IT, it is likely that the enterprise sector will wait for Cloud BI to mature before migrating. However, while the majority of enterprise software remains deployed on-premise, research carried out by industry expert Wayne Eckerson (2012) found at least 36% of businesses had already partially adopted Cloud-based BI software.

Likewise, a joint report by BIScorecard and Intelligent Business Strategies (2012) found that 46% of companies considered Cloud BI as “important-to-critical”. This is supported by a recent Gartner (2013) report which predicts that Cloud services spending will continue to outpace other parts of the IT marketplace, with worldwide spending expected to grow 17.7 percent through to 2016.

In broader terms, and when considering Cloud migration overall, IDC (2013) predicts total spending on Cloud services will surge by 25% in 2014, reaching over $100 billion. Furthermore, Analysys Mason (2013) recently forecast that the global enterprise Cloud-based services market will reach $31.9 billion in 2017.

The Future For BI In The Cloud

BI in the Cloud will continue to evolve to meet the changing needs of those using business intelligence. Long term, the future is likely to include ‘Plug and Play’ applications which are scalable and secure. It’s likely that BI apps will become additional modules within ERP systems, representing the easiest deployment model with less resource needed at every stage of the process.

Undeniably, the use of Cloud computing is growing and while companies are increasingly recognising that BI in the Cloud is a matter of when rather than if, it is critical that any migration is underpinned by a meticulously well-thought out strategy that mirrors the needs of the organisation.

A phased approach will ensure that migration costs do not exceed the overall benefits to the business and will enable companies to leverage their business intelligence in the Cloud effectively. Of course, having an easy to use browser-based BI solution which technically supports Cloud systems and multi-tenancy, such as Intuitive Dashboards, will be key to achieving growth in this sector.

Edward Smith

Edward Smith is responsible for leading the engineering and implementation teams at Intuitive Business Intelligence. Trained as a software developer, he became a specialist in business intelligence, analytics and datawarehousing, holding consulting or executive positions at Accenture, ING, Shop Direct Group and Lastminute.com. After many years working with established BI software tools, he recognised the opportunity to build a more user-friendly and functionally superior tool, which led to the formation of Intuitive Business Intelligence. Ed holds a Bachelor's of Electronic Engineering from Birmingham University and an MBA from Cambridge University.