BI As a Service: Ready to Explode?

A post by David Linthicum on the Intelligence Enterprise weblog called “SaaS Explodes…” has statistics on the growth of software as a service in large organizations that can give some hints about the future of BI as a service.

It’s a cultural issue

I wholeheartedly agree with David’s sentiments:

“What’s significant is not that SaaS is growing, but that SaaS is gaining acceptance within businesses that rejected SaaS only a few years ago. Indeed, I remember a meeting at a particular company back in 2003 when I was told that “We will never use an application we don’t own.” In 2006 that company implemented three SaaS-based applications. So, I guess you should never say ‘never’.”

I have similar conversations with customers today about BI as a service. There’s no longer any real technical or security reasons not to have hosted BI — it’s primarily a cultural issue.

When I ask people whether they’d be interested in such a service, people typically say “no, it’s too important”, or “we’d be worried about security”. But these are also good reasons to leave it to specialists. After all, you trust your money to a bank rather than keeping it under your mattress, don’t you? And are you really so confident that your IT systems are more reliable and secure than dedicated hosting?

If BI as a service is cheaper and more convenient than installing it in-house, cultural attitudes will change rapidly, as they apparently have been for SaaS in general.

It’s not just for the mid-market

Most of the talk about BI as a service has assumed that mid-market organizations are the only target, but I’ve seen a surprising amount of interest from larger organizations. With efficient data integration techniques and service-oriented architectures, it’s now easy than ever to imagine fully hosted, end-to-end BI, even for larger organizations with complex systems. 

BI extranets and information as a service

There are two trends that may help drive BI as a service adoption. The first is BI extranets. These are far from being new, but they’re probably not as common as they should be. Providing information to your top customers and suppliers can provide spectacular ROI, but companies find BI extranets difficult to implement. Anything that removes technical barriers to deployment to an outside audience can only help (although it won’t help solve the data quality and business relationship issues that are often biggest barriers).

The second is “information as a service”. What company executives really care about, such as market share and relative performance, doesn’t come from internal systems. There are many providers of market data today, but integrating it with internal systems it is typically a cumbersome and manual process. By providing a hosted platform with links to external information, BI as a service has the potential to make performance benchmarking easy, and make BI more relevant to the C-suite. 

No controversy

As usual, it’s not black and white — the future of BI is likely to be a blended mix of hosted and non-hosted solutions designed to appear to the end users as a coherent whole.

Over to you — what do you think are the principal barriers to BI as a service in the short and long term?