SaaS BI – Software as a service model in Business Intelligence

SaaS has taken off in a big way in the past few years. And BI has not been lagging behind. For leading vendors like BOBJ (an SAP company) or Cognos (an IBM company), it’s going to be close to 2 years now since they started their SaaS BI.

What exactly are the advantages of SaaS over the traditional approach?

Benefits are aplenty, from zero costs of purchasing hardware, hiring of key IT personnel like system administrators and DBAs, to minimal implementation and maintenance costs. With CRM being made affordable to SME (small and medium-sized enterprises) by salesforce.com (note the huge success of its AppExchange), and the fact that large enterprise adoption of BI was complete, meant that the only scope for future growth in BI would come from upgrades of platforms (analogous to Microsoft’s Windows operating system – think of BOBJ upgrading from 6.5 to XI) or from expansion in the SME space with better offerings.
In fact, with Google distributing its Apps, Serena jumping on to the bandwagon with its project and portfolio management (PPM) software, and even Tata Consultancy Services launching its own ITaaS (IT as a service), SaaS is almost confirmed to be the software delivery model of the future.

The marginal cost of acquiring SME customers is reduced due to the nature of the SaaS service, and this has encouraged more and more BI companies to venture into exploring this delivery model for BI. There are niche players well entrenched in this SaaS BI space: LucidEra, Oco, Information Builders and PivotLink – and a few of them provide the entire range of BI – including ETL and not limited only to reporting. But now the bigger fish have also ventured into this space. Going by the success of BOBJ’s crystalreports.com or its Information OnDemand (a project which biguru was involved in developing) and IBM Cognos Now!, there seems no doubt over the future direction that BI delivery is headed. Did I mention almost all of these can work together with Salesforce?

As much as SaaS BI is redefining delivery mechanisms from the perspective of the vendors, it also involves a paradigm shift for the customers. Finally, it is less a question of technology, than it is about the benefits to the business, the ROI and focusing on the core competency of the enterprise. In a sense, SaaS ‘outsources’ all of the IT to the vendor, leaving business to deal with issues like implementation and managing requirements. It is also a pointer to the maturing of the industry – from discovering requirements to providing relevant information and insight.

The technology implications for the vendors are daunting. For once, they need to expand in domains outside their core areas, from maintaining data centers to ensuring bug-free roll-outs, even though they’ll also have the luxury of not having to maintain multiple version stacks. On the web, users become far more demanding, and are far less willing to break their heads while figuring out why something won’t work due to a missing dll or patch etc.

Improvements (both aesthetics, ease of use and navigation) in the user interface, as well as performance requirements have already seen a sort of standardization on Adobe Flash as the medium of delivery for dashboards. Even though AJAX/Javascript is also in the picture, the complexity of coding and longer cycle times seems to be tilting the scales in favor of Flash. As user experience gets paramount, BOBJ has launched its latest visualization offering Xcelsius 2008 (version 5) which also includes an SDK for interoperability with Adobe Flex, to build sites like Information OnDemand.
With BI getting more business-process centric, SAP is now focused on embedding BI capabilities in its range of offerings. Business Objects is currently tinkering with TAWS (Take Action as a Web Service) in its Labs, which would allow its dashboards to use web services to plug into the service-oriented-application-architecture. With respect to hot-plugging into the SOA architecture of BI, however, Oracle has made great strides and even IBM Cognos is better placed.

The future of SaaS BI and enterprise BI SOA seems interesting indeed.

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9 responses to “SaaS BI – Software as a service model in Business Intelligence

  1. Thanks for a great post. I’d like to expand on your comment that the technology implications of on-demand BI for the traditional BI vendors are daunting. Yes, they certainly are, but even more challenging are the business implications for the traditional vendors. I ran the Siebel CRM OnDemand divisions at Siebel, and was responsible for leading Siebel’s entry into the on-demand world. We spent a lot of time making sure we had the technology issues covered, but what ultimately caused the biggest challenges were the inability to change business models. The Sales team wanted to focus on the classic million-dollar enterprise deals with large commissions, and no matter how we played around with the commission structures, we couldn’t get our sales people to focus on the on-demand product. And, the solution of creating a separate on-demand sales team caused an internal civil war. The Marketing department couldn’t figure out how to tout the advantages of on-demand without the message sounding somewhat challenging to the older on-premise software. Finance didn’t like the fact that they had to recognize on-demand revenue month-by-month instead of all up-front, and they didn’t like that usually they didn’t get all the cash up-front either. And the list goes on…

    It’s because of these reasons that I started LucidEra as a company focused exclusively on on-demand BI. With no conflicting business models to wrestle with, we can focus on innovation and the success of our customers. Just as salesforce.com ultimately succeeded over those companies wrestling with the “hybrid” on-premise / on-demand business models, you’ll see the same thing happen in the BI world.

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  2. Ken

    Thanks for your comment which provides valuable insight into the inner workings of the traditional BI companies.

    As far as business models are concerned, the Big Four have no choice but to have an all-encompassing portfolio. With increasing saturation in the enterprise space, they’re going after the SMEs – and this certainly will make the bigger enterprise customers more demanding somewhere down the line.

    The fact that we are only just starting to address data quality issues with DQ and Master Data Management speaks of the scope of improvement possible by smaller players. As with any field which sees competition, BI will also benefit the consumer from such value-add areas.

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  3. So all I have are questions :

    You mentioned that these integrate into Saleforce.com. … Can you clarify ?
    Do the interfaces integrate ?
    Does the Salesforce data integrate ?
    All of the above ?

    I was looking to embed a SaaS BI solution within SalesForce.. is that possible with these vendors ?

    2

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  4. Jim,

    It is entirely possible to embed PivotLink into salesforce either through Tab or iFrame.

    Please send me an email if you would like to discuss.

    johnm@pivotlink.com

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  5. Jim, the answer is all of the above.

    Hopefully be now you’ve found what you’re looking for.

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  6. Pingback: How Business Intelligence Influences PLM? « Daily PLM Think Tank Blog

  7. Hi,

    I think the biggest challenge here is not technical. Many businesses may not be willing to upload their sensitive data on SaaS service provider’s systems and latency issues associated with that. I would be interested to know how such issues are resolved?

    Thanks
    — PK

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  8. You may want to look at miyann (https://www.miyann.com). It has just gone into beta and offers a SaaS based delivery system with the added benefit of keeping data on premise. There is no need to upload any report definitions or data and everything is live. This will be a huge benefit to those who do not want to store confidential data on third party servers.

    In addition, there is a free Java report designer available, which cuts down greatly on license fees and allows development on any platform. It is free to use currently as it is in beta, but will be a very cost-effective subscription service (far less than any of the other options).

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  9. SAAS bi solutions as you said is absolutely on providing quality bi on demand, to the sme’s who may not consider spending much for bi products. SaaS bi implementations made it easy for any of them to get benefits of bi, a must have for business these days.

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