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Business intelligence in the cloud: Is SaaS BI in your future?

The growth of cloud computing as an application platform means business intelligence teams should at least be prepared for the possibility of Software as a Service BI deployments, analysts say.

The concept of doing business intelligence in the cloud has yet to gain a large number of adherents among user organizations. But Software as a Service (SaaS) BI does appear to have staying power as at least a niche technology, particularly at small and medium-sized businesses that are seeking to speed up the process of getting started with BI and analytics tools.

In a recent report on the BI software market, Framingham, Mass.-based market research firm IDC noted that SaaS BI tools still generate only a small fraction of overall business intelligence revenues. IDC added, though, that it expects growing interest in subscription-based pricing models and technology packaged to address departmental and small-business needs to continue to drive increased SaaS BI adoption.

Also helping to boost SaaS BI as a potential option for organizations is the broader growth of cloud computing as a platform for running business applications, according to William McKnight, president of McKnight Consulting Group LLC, a Plano, Texas-based consulting firm that focuses on BI, data warehousing and master data management.

“Companies are getting swept up in a rush to the cloud,” McKnight said. “It’s an important investment point for most organizations and it’s going to be considered. The cloud model allows you to save money if it’s done right.”

At the Association for Manufacturing Technology (AMT) in McLean, Va., a SaaS business intelligence system deployed earlier this year has simplified the process of distributing reports and BI data to the trade group’s members. The cloud BI tools have also been much more economical for the association than investing in on-premises software, new hardware and internal IT resources would have been, said Pat McGibbon, the AMT’s vice president of strategic information and research.

In particular, business intelligence in the cloud gives the AMT to ability to scale the BI system up or down as needed without requiring substantial investments or creating an administrative burden for the group’s IT staff, according to McGibbon.

“As long as SMB companies like us want to get into this and want to scale [our systems], that’s the big deal,” he said. “We didn’t have to make one large purchase to get things up and running, and we can scale down to a dozen [users] or work up to thousands and it would still pay off.”

Integration at issue with BI in the cloud
Data security concerns are one potential roadblock to a brighter future for SaaS BI. Vendors also continue to face questions around the maturity of technology for integrating cloud BI tools with data warehouse systems and other data sources residing inside corporate firewalls. Some early adopters of SaaS BI technology reported difficulties in integrating data from multiple source databases and applications, which fueled concerns that the SaaS approach wasn’t suited for complex environments, especially ones with homegrown or highly customized applications.

That rap against the technology is starting to dissipate as both SaaS BI and data integration vendors release new tools to facilitate extract, transform and load (ETL) processes for integrating data into cloud-based BI applications.

The increasingly widespread availability of such tools is something that Jamie Buck has on her radar screen. Solid data integration support is a required component of Buck’s plans to evolve an existing SaaS BI implementation at Foundation Source Philanthropic Services Inc., a Fairfield, Conn.-based company that provides back-office management and advisory services to private foundations.

“It’s all about connecting to whatever data sources you have,” said Buck, manager of special projects at Foundation Source. “You have to have all the pieces of the picture together in one place, so integrations to other data sources are key to the future.”

With cloud-based software becoming a fixture in many IT infrastructures, BI and data management professionals should be prepared for SaaS BI deployments or hybrid systems in which BI data resides both within and beyond corporate firewalls.

“When you stand back and look at the data ecosystem, you’re seeing a mix of technologies,” said Shawn Rogers, a BI and data warehousing analyst at consulting firm Enterprise Management Associates Inc. in Boulder, Colo. “The way things are evolving, SaaS will be part of life -- it’s that simple.”

Beth Stackpole is a freelance writer who has been covering the intersection of technology and business for 25-plus years for a variety of trade and business publications and websites.

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