Hurdles for SaaS BI vendors include data integration, low recognition

Data security isn't the only issue holding back SaaS business intelligence vendors. Data integration and limited market visibility are also gating factors for SaaS BI.

This is a two-part series on SaaS business intelligence technologies


Concerns about the security of storing sensitive corporate data in the cloud isn't the only issue that SaaS BI vendors need to overcome as they try to grow their customer bases.

For example, despite some recent data integration developments, SaaS BI offerings are still less than ideal at integrating data from multiple databases and applications, according to industry analysts.

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 Betsy Lenahan, head of marketing at the Metro Atlanta YMCA, said the integration issue is coming into play at the Y as part of a planned deployment by its finance department, which follows a recent rollout of Birst Inc.'s SaaS BI tools for marketing uses.

The marketing department had to take information from just a single data source, but the finance unit needs to pull together data from disparate systems for payroll, general ledger and other functions. Birst is working to create bridges linking the various systems, and Lenahan said Y officials "have confidence they will do that, because they know their product can't move forward without it."

Visibility in the market is another gating factor for SaaS BI vendors. During a session on new BI technologies at this month's TDWI World Conference in Orlando, only about 10 people in the audience of more than 100 raised their hands to indicate that they had looked at SaaS BI technologies. And only a couple said that they had heard of either Birst or rival PivotLink Corp.

"It's still an emerging market," said session leader Cindi Howson, a BI consultant and founder of the technology evaluation website BIScorecard.com. Howson advised attendees to evaluate the funding, market share and business viability of SaaS BI vendors before committing to use their technologies.

Distribution Market Advantage Inc., a food distributor in Schaumburg, Ill., had no qualms about being an early adopter of SaaS BI. DMA began using PivotLink's cloud-based tools in late 2004 to enable the supply chain managers at restaurant chains and other customers to track and analyze their purchases.

Because the BI applications were being deployed for external users, PivotLink's ease of use was a big draw, said Jim Szatkowski, DMA's vice president of program and data services. And the distributor was already using a SaaS-based order entry system and had become a fan of the online approach. "We were in a mindset that we were inclined to go with SaaS," Szatkowski said. "The decision we made was not to turn ourselves into technologists."

The SaaS BI applications are being used by about 50 customers, he said. DMA's order entry vendor hosts and maintains the distributor's data warehouse, which contains about 130 million rows of data, and sends normalized sales info to PivotLink. Szatkowski said DMA is starting to roll out end-user dashboards that PivotLink has added to its applications; the dashboards are expected to give users new data visualization capabilities as well as access to additional data sources and performance indicators.

PivotLink said it has about 75 customers, while Birst CEO Brad Peters put his company's user base in the "high double digits." The biggest hurdle in attracting new customers isn't the newness of the SaaS approach, Peters maintained; it's the fact that most large companies in particular already have BI tools in place. "People have bought a lot of other things, and we have to convince them of why they should buy something else for their next project," he said.

 

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