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Cloud-based analytics still mostly on the horizon

Business intelligence and advanced analytics applications have yet to make a big mark in the cloud, despite vendor efforts to push cloud analytics.

Business intelligence vendors have been offering Software as a Service applications for years, but SaaS BI has yet to catch on with users in a big way. Advanced analytics users in the cloud are an even rarer sight.

"We rarely encounter organizations seeking to do analytics in the cloud," said Eric A. King, president and founder of The Modeling Agency LLC, a data mining and predictive analytics consultancy. According to King, more cloud-based analytics tools are becoming available, but customer interest isn't keeping pace -- "at least we're not directly experiencing it in the trenches."

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Many organizations are reluctant to send critical BI and analytics data outside their corporate firewalls because of security concerns. As companies move applications to the cloud, "analytics isn't necessarily the first port," said William McKnight, president of McKnight Consulting Group. "Tools in the cloud need to gain trust."

Vendors are trying to raise the profile of cloud analytics. For example, SAS Institute Inc. this month plans to release a new version of its core analytics platform that supports public or private cloud deployments. And in May, IBM announced a three-year procurement services deal with cosmetics maker L'Oreal USA that includes a cloud-based analytics component.

IBM itself has been using a private BI and analytics cloud since 2009. The cloud system, which has about 200,000 internal users, started with the company's Cognos BI software and now also includes its predictive analytics and social media analytics tools, with more functionality on the way. Meleisa Holek, manager of IBM's internal business analytics competency center, said the cloud approach has created a standardized technology suite, enabling new BI and analytics applications to be set up for business units in just a week.

But even IBM faces challenges in making the full vision of cloud analytics and BI a reality. For example, it wanted to build an integrated public cloud to give business partners access to the internal system. But Cognos doesn't support multi-tenancy, which forced the company to develop a separate cloud system for the partners.

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