Although business intelligence (BI) Software-as-a-Service sales will grow at three times the rate of on premise equivalents over the next few years, analysts have mixed views over how long such offerings will take to make a real market impact.
A new report from researchers IDC predicted that BI SaaS purchasing would grow at a compound annual rate of 22.4 per cent until the end of 2013, although actual revenue totals would remain a small part of the overall market.
Moreover, in a ‘most-likely-to-buy-from-the-cloud’ list devised by the company, BI and analytics services were positioned only ninth in a table of 12, with collaboration applications coming out top.
But Frank Gens, senior vice president and chief analyst, said he was surprised by the results. “Right at the bottom of the list are three IT areas – business analytics, application development and test and security – that I actually expect will be very hot areas for cloud services adoption over the next two years.”
The discrepancy between his views and those of the potential purchasers surveyed could reflect poor awareness of potential offerings and a lack of big brand name companies providing such services, however, he added.
But Boris Evelson, an analyst at Forrester Research, disagreed with his contention. In a blog entitled ‘BI in the Cloud? Yes, And on the Ground Too’, Evelson said that he did not see “a stampede to replace traditional BI applications with SaaS alternatives in the near future”, although the latter could legitimately be used today as a complement existing offerings.
Such services could also prove helpful when employed by “power analysts” in BI workspaces and might also have some application in small-to-medium enterprises.
But Evelson believed that adoption was likely to grow over time due to continuing changes in business and regulatory environments, which could make it difficult for on premise software to keep up. As relational database vendors also began to move their systems into a cloud environment, it would become easier for organisations to move their own BI applications there too, he added.
If going down the BI SaaS route, however, Evelson advised organisations to evaluate the risks and attempt to mitigate them in several ways. Firstly, they should undertake due diligence on security, backup and disaster recovery provision.
Enterprises should also scrutinise pricing and contract issues and evaluate the true long-term cost of ownership. Finally they should double check whether they required additional source data licences and always plan for the worst.
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