Business Intelligence: The SaaS revolution (Part 4)

As Scott Morrison, Chief Technology Officer and Chief Architect at Layer 7 Technologies, stated in his article – BI is dead. Long live BI. The Future of Business Intelligence in the Cloud – the popularity of Business Intelligence (BI) as a Software-as-a-Service (SaaS) application is growing rapidly.

As Morrison’s title suggests, SaaS technologies are dramatically altering the way that those in the BI industry are making their services available, and how businesses are harnessing the power of reporting and analytics software.

In our blog post – The benefits of Business Intelligence in the Cloud (Part 2) – we outlined some of the potential reasons why organizations might consider BI SaaS deployments, including reduced capital expenditure, reduced Total Cost of Ownership, increased corporate agility, minimized need for IT support and improved end-user adoption rates.

Evidence suggests that many organizations, particularly small to midsized businesses (SMBs), are already heeding the alluring call of the SaaS providers. And as Morrison concludes: “If your career is centered around BI, you need to be ready for this revolution.”

More organizations turning to BI SaaS

A recent survey of 500 US based IT end-user clients by non-profit trade association, CompTIA, found that organizations will continue to rapidly initiate or expand on existing SaaS projects in 2010.

The study, Cloud Computing: Pulling Back the Curtain, said that the move would be led by SMBs, sighting decreases in service provider costs due to marketplace competitiveness, as a leading factor for the spike in interest and uptake.

As SaaS removes many resource barriers – time, personnel and capital expenditure costs linked to infrastructure set-up – normally associated with in-house IT programs, it is unsurprising that companies who under normal circumstances would struggle to absorb those costs, are exploring SaaS alternatives.

Around 64 percent of midsized companies surveyed (annual revenues between $US 10 million and $US 99.9 million) said that they were already heavily involved in the Cloud. By comparison, 36 percent of small companies (less than $US 10 million annual revenue) and 58 percent of larger firms ($US 100 million or more) were already involved in Cloud projects.

Almost 75 percent of all organizations surveyed said they intended to increase spending on Cloud programs, with 64 percent sighting that expected increase at five percent or higher.

These results were reflected in the 2010 Aberdeen Group study – Fast, Affordable, Agile: The Case for SaaS BI – which surveyed 400 BI users.

The study confirms the BI SaaS market is growing fast, revealing that the number of BI SaaS deployments across all organizations increased from seven percent in 2008, to 15 percent in 2009, with continued growth in 2010.

The Aberdeen results also confirmed that SMBs, who wouldn’t have been able to afford traditional on-site BI, are leading the charge in relation to the uptake of BI SaaS applications. Over half (52 percent) of SaaS BI users are organizations with an annual revenue lower than $US 50 million.

Key BI SaaS drivers: Reduced costs, increased pervasiveness and agility

The predominant reasons given for embarking on Cloud initiatives by respondents of the CompTIA survey were:

  • To reduce capital expenditure (85 percent)
  • To reduce costs (84 percent)
  • To enhance technological capabilities (81 percent)

Again, similar results were uncovered in Aberdeen’s BI specific report, which outlined the two main drivers for SMB adoption of on-demand BI as:

  • Increased employee access to reporting and analytics with minimum IT involvement and maintenance required (52 percent) (Conventional BI tools too complex for business users)
  • Cost reduction due to IT budget cutbacks (38 percent)

Increased employee access to reporting and analytics is vital to maximize the benefits of BI and achieve Return On Investment for BI projects. Companies using SaaS as their BI tool had 50 percent more employees involved in the BI process than those using non-SaaS BI, according to the Aberdeen survey.

Additionally, organizations that use BI SaaS have significantly higher business user involvement in the purchase process, compared to conventional on-site BI implementations.

The Aberdeen Survey concludes that SaaS BI aids widespread user adoption and fosters greater BI agility.

The time to act is now

As evidence of the SaaS trend, Reuters reported last Wednesday that the Cloud Computing industry dragged down the Nasdaq and Dow Jones, as leading companies in the data services industry experienced intensified marketplace competition.

Leading services provider, Equinix, announced a reduced revenue outlook after it was forced to drop its services prices to maintain customers. The report went on to state that several other players in the data services market – NetSuite Inc, WMware Ince, Salesforce.com Inc, F5 Networks Inc, Rackspace Holding Inc, Savvis Inc, Citrix Systems – all lost ground.

This price erosion, due to stiff industry competition, indicates that BI SaaS has never been more affordable, and SMBs in particular have an opportunity to gain the benefits of expansive reporting and analytics.

Yellowfin Is “ready for this (SaaS) revolution”

Whilst Yellowfin’s 100 percent Web-based reporting and analytics tool means that it already represents a pervasive and agile BI solution, Yellowfin in the Cloud can deliver increased client value and flexibility.

Yellowfin has you covered – Yellowfin is the only BI tool on the market that has been designed from the ground up to support SaaS deployment. Find out more about Yellowfin in the Cloud.

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