SaaS (Cloud) BI - Questions Worth Asking

Is Business Intelligence (BI) as a Service a leap forward, or a step back?

For a couple of years now, there has been a substantial amount of hype in the business intelligence (BI) space regarding “cloud BI,” or business intelligence systems hosted by Internet “cloud computing” service providers. This “cloud BI”, which is actually SaaS (software-as-a-service) BI, has been riding the wave of cloud computing in general, with the lower startup costs, faster deployment and easier scalability that cloud-based software implementations promise business customers. Several new companies have emerged and are promoting a new golden age of BI which they say will be faster, easier and cheaper than conventional business intelligence.

While this sounds fantastic at first glance, it might be a good idea to look beyond the hype to determine if deploying a BI solution in the cloud offers the same types of advantages of other SaaS solutions, such as CRM, accounting and email.

To this end, consider the answers the following questions:

1. Does SaaS BI reduce dependence on IT staff?

One of the main claims of SaaS software solutions in general is the dramatic reduction in dependence on expensive (and overworked) information technology (IT) professionals. In many organizations, the limited availability of IT staff is a major bottleneck when considering implementing a new software system that will be used across the organization. The cloud offers an appealing solution: since there is no hardware to install, no software to upgrade, no storage to backup and no new security mechanisms to implement, adopting a cloud solution (mostly) circumvents the need for extensive IT services (whether from in-house personnel or consultants).

In the realm of conventional BI systems, dependence on IT is a common and frustrating bottleneck for business users. The IT department (or consulting firm) is required for every piece of the BI puzzle, from the data warehousing to creating OLAP cubes to creating and customizing individual reports. In most companies, business users quickly discover that getting what they want from their company’s BI system, including incorporating new data sources, adding reports, customizing dashboards and extending the system to more users/departments, requires IT resources which are often unavailable when needed. The result is a frustrating and compromised system which fails to deliver on its full strategic potential.

So, does moving to the cloud solve this central problem of conventional BI?

The truth is that hosted BI solutions are really just outsourced IT departments which happen to come along with a bag full of their own home-grown or third-party software systems. All the stages of the familiar BI system deployment – from requirements specification consulting through data warehouse creation through report customization – still require the involvement of IT staff.Since these IT professionals are experts in their software and environments, they will likely be more efficient than hiring or retraining your company’s own staff (although they will not likely be more effective than any other dedicated outsourced technical BI team). However, think carefully about how much you want to be dependent on outsourced IT services for the lifeblood of your company’s strategic decision-making platform.

If your BI needs are modest and don’t change often, then, in theory, you will probably end up saving money as compared with hiring your own IT staff for BI. However, as the system grows and extends (as it always does), you will be at the mercy of the schedules and price rates of a third-party IT team which you are locked in to. If you thought internal IT can be a bottleneck, imagine how difficult it will be to get good and timely service from an external IT department located far away and busy with numerous other customers as well.

To succeed at its primary goals, business intelligence (hosted or not) must be a fast and flexible tool for the business user. As long as you remain locked into complete dependence IT staff to support your BI efforts, you definitely want them directly answerable – and close to home.

Learn how SiSense Prism makes both business users and IT happy

2. Does SaaS BI compromise your data security?

There are two unrelated issues to think about here.

Firstly, the growing list of high-profile data breaches should give anyone pause to consider what might happen when sensitive corporate data is at risk of exposure to unauthorized third parties, whether external hackers or employees of the cloud BI company (or their infrastructure providers). Besides the business risks which could be caused by exposure of your data, there may also be legal repercussions of certain types of regulated data being exposed. Even if the cloud provider is at fault, ultimate legal responsibility always lies with the owner of the data.

The second issue relates to the intellectual property contained within your company’s BI system. Serious BI solutions always involve customized and particular application of BI technology to answer certain business questions and analyze data in creative new ways. Advanced BI users build a lot of their decision-making strategy into the queries, reports and dashboards they utilize. For example, which key performance indicators (KPIs) are tracked and how can be a big part of the “secret sauce” of a company’s management approach. Sharing this critical source of competitive advantage with a cloud BI vendor, which profits from offering more effective BI solutions to hundreds or thousands of customers, is taking a big risk. How would you feel if your innovative approach to data analysis and decision-making suddenly appears in the next version of the BI product available to your competitors? BI gives business strategy a tangible form – something that you should do your best to protect without compromise.

Learn how SiSense Prism keeps your data safe, behind your firewall

3. Is all your business data already in the cloud?

Any type of simple business reporting can be called “business intelligence” by someone. However, modern BI used by companies to gain critical competitive advantage involves combining and analyzing lots of data from numerous disparate sources. Even in-house analysts tasked with delivering “simple” business reporting to their department managers using Excel know how much time and effort is involved in accessing, collecting and combining all the data they need to produce their reports.

For a company that is already entirely “cloud-based” – meaning, that all of their data-generating systems are already in the cloud with interfaces to make that data available to a third-party cloud BI solution – cloud BI might make sense. However, most companies today have plenty of data in databases, data warehouses and client-server applications running inside the organization.

Getting large quantities of data into the cloud – and keeping it all synchronized – is a major barrier to adopting a cloud solution for enterprise-scale BI. The conventional extract, transfer, load (ETL) process required for data warehousing and BI is challenging enough without adding Internet data transfer and remote data management to the mix.

Learn how SiSense Prism easily handles both cloud and on-premises data

4. How much will hardware cost you in the Cloud?

The types of SaaS solutions which have gained popularity have modest memory and CPU requirements, compared to ad-hoc analytics platforms. It simply does not require that much horsepower to run an email, accounting or CRM application as it does to allow the same number of users to explore, join and aggregate historical data at will. And most modern BI solutions require this ability.

A machine with the needed amount of RAM and CPU power required to deliver this kind of solution doesn’t come cheap: typical BI solutions require high-end hardware with strong multiple CPUs and dozens of gigabytes of RAM. Hosted BI vendors charge you for the hardware your implementation requires (they have to if they want to remain in business). Despite the low-cost promise of the cloud, the fact is that renting this kind of hardware instead of buying it will soon end up costing you substantially more.

To avoid this issue, cloud BI vendors may try to convince their customers to limit the amount of data available to particular queries. For example, by reducing the number of rows of historical data or the number of fields queried, they will be able to lower the solution cost to you and appear more competitive. However, compromising the amount of data available to business users directly damages the value of the business intelligence available to them and should really only be an option of last resort.

Learn how SiSense Prism saves you a ton on hardware

5. Is BI backbone technology becoming more cloud-aware?

The cutting-edge technology touted by the established business intelligence vendors (such as SAP, IBM and Microsoft) as well as successful younger firms is all based on either “desktop enabling” technology or “in-memory database” (IMDB) technology. These technologies, particularly IMDB, are not very “cloud aware” and were not designed with cloud computing as a consideration.

Their lack of cloud-awareness means that these technologies were not designed with the real-life of cloud-based solutions - namely how rare/expensive high-end machines are in the cloud and the fact many cloud-solutions are not setup on dedicated servers (at least not initially).

These technologies are designed to maximize the BI productivity of stand-alone PC computers and happen to be very unsuitable for distribution across multiple machines, which is the basis of low-cost, easily-scalable cloud infrastructure.

Furthermore, the biggest gains from these technologies are realized when using powerful desktop or server computers. This stands in direct contrast to the premise behind cloud computing architecture, namely that computing operations should be distributed across many inexpensive machines running in parallel.

The current crop of cloud BI vendors are not even using the latest advances in BI technology, but are essentially using the same backbone technology as the traditional, on-premises vendors. Thus, their solutions exhibit the same disadvantages of most conventional BI solutions, including great complexity, long development cycles and heavy dependence on IT staff.

The newest technologies in the BI space are about putting more control in the hands of business users, otherwise known as do-it-yourself (DIY) BI. The cloud BI solutions available today are based solidly on the old-style, IT-centric approach to BI which is currently moving out of favor with more and more momentum. Even if the “pure cloud” BI platform vendors are, one day, able to deploy better technologies more suited to the cloud infrastructure and DIY BI, that day is still years away.

Learn why Prism's ElastiCube technology is the perfect fit for cloud computing

Using the cloud to evaluate an On-Premises BI solution

While the above may give you pause if you have been considering the adoption of a SaaS BI solution, the cloud does provide a huge benefit as regards your preparations for implementing an on-premises BI solution: the immediately-available, inexpensive and elastic provisioning of computer hardware that the cloud provides offers an ideal environment for evaluating and benchmarking any BI software you are looking at.Instead of guessing how much RAM and CPU power your solution will need in the near term (and even long term), you can go ahead and test various configurations using the cloud computing’s pay-as-you-go model. Before investing in the purchase and configuration of high-end hardware, you can “rent” any configurations of hardware you want to test for just a few days or weeks at a time (using Amazon EC2, for example). You will be able to quickly determine how varying levels of hardware respond to the real-life scenarios your solution requires, including the most complex queries you expect to require, the maximum number of concurrent users you will require and so forth.

The cloud also allows you to experiment with different products from different vendors over your own data before you’ve invested in the expensive hardware they may require. Of course, if you discover that a particular BI product is too complex to quickly set up for evaluation and benchmarking, you might want to reconsider using such a product in the first place!

Try SiSense Prism on-premises, or in your private cloud now!