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Cloud BI cost-effective, but real-time functionality still not robust

Running BI in the cloud is attractive from a cost standpoint, but there are serious potential drawbacks, industry watchers say.

Chances are companies in the market for a cost-effective business intelligence (BI) tool are looking seriously at BI in the cloud. That’s because going with a cloud BI offering means they don’t have to buy, install and maintain hardware and software. The cloud application provider takes care of all that and bills customers on a pay-as-you-go basis. Sounds great, right?

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Perhaps not -- or at least not yet. When it comes to customer relationship management (CRM) or sales force software, cloud choices are well-established and fully functioning. To suggest using on-premises versions of this kind of software would draw a raised eyebrow or two.

But the picture isn't so clear when it comes to running BI in the cloud, according to consultants and analysts. The problem isn't a lack of choices -- established vendors and specialized, or “pure play,” vendors have cloud BI offerings.

Challenges facing cloud BI platforms

Four main issues are currently hindering BI in the cloud:

  • Most cloud BI tools are not as fully developed as on-premises versions. While this should not come as a surprise, given that cloud BI is a relatively new phenomenon, it should give companies pause. “The BI cloud offerings are not as mature as some of the other cloud offerings that are out there,” said Rick Sherman, founder of Athena IT Solutions, a data warehouse and business intelligence consulting firm based in Stow, Mass. “It’s been slow for the vendors to provide complete offerings.” Even the established vendors offer only a subset of their BI capabilities in the cloud. So certain features users would expect from BI, such as the ability to import financial data for planning, might be missing. The market has been somewhat volatile, too, as at least one cloud BI company shut down recently.The upshot: If the company needs a tool to help it glean actionable insights from a mass of data -- that is, it really needs BI -- then it most likely will not be satisfied with cloud BI in its current format. But if users are just looking to experiment, a cloud BI pilot might be in order (and will not cost much, if anything, according to Sherman).
  • Most businesses won’t be able to leverage the cost savings of cloud BI. The majority of midsize companies (excluding those at the lowest end) already employ a number of BI tools, Sherman said. This happens because they don’t put the time and effort into the data part of the BI implementation and install several different tools  to find one that works better. As such, most midsize companies have siloed BI, in which different departments use different BI tools. “The average firm with over $500 million in revenue has five to seven BI products installed,” Sherman said. “For them, cloud BI is tool number eight. To get the cost advantage you would have to rip out the other stuff. Most companies never do that.”
  • For companies that need real-time analytics, cloud BI will probably not be sufficient. Using BI in the cloud requires transferring company data to the cloud provider and running analytics in the cloud. “Uploading the data to the provider can’t be real time, at least not now,” said Jesper Vork, formerly a BI consultant and now chief systems architect for Performance Partners Inc., which is based in Bellevue, Wash. Whether the delay from rolling up data to the cloud is a day or an hour, it won’t be up to the minute as with an on-premises BI system, according to Vork.
  • Customers still have concerns about security and privacy of data in the cloud. This relates to the cloud in general more than to cloud BI specifically. Though both Sherman and Vork said they believe cloud offerings are secure, cloud providers vary widely in how they implement security and privacy provisions for the cloud, and that can create issues. The consultants also say beware vendors that offer free trials of their cloud BI applications but won’t let customers save their data without making it public. They might have to buy the full version to fully secure their data.

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