BI & Analytics – Own or Rent?

11 min read

 

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How many of us do you think will be watching traditional linear TV or buying printed newspapers on the corner in, say, 3 or 5 years? I know that I won’t. Would you? Does it matter for BI? Let’s give it a peek…

 

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Willy Koulichev, CEO and founder.
1on1 BI-solutions.
(http://www.1o1bi.com/)

 

 

 

Streaming has become the new broadcasting nirvana. A huge IoT enabler too! Apparently, more and more of us are only streaming our favorite news, movies and shows right down on our tablets or phones or … wristwatches lately! Especially the young generation is all about streaming today. Gartner pointed out five years ago that there were sold twice as many smartphones than toothbrushes worldwide! Today we typically buy access to channels and pay per view/use on demand. People would rather rent multimedia gear and content at will, and don’t really care to own any. Still wondering what all this has to do with BI? Well, a fair question here is …
Why should BI & Analytics be different? Why invest millions in our own HW/SW and expensive facilities, staff and utilities if we simply can rent all this by the hour, and use only as much as we need when we need it? It’s more than just a fair question. And it makes you wonder… Will Cloud & SaaS BI finally take over?

 

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It’s a very hot topic! Both the BI vendors, the users, and the renowned world Analysts are watching this trend very closely. For instance, Dresner Advisory predicts (2016) that «public Cloud BI is maturing and becoming mainstream«. Their extensive survey from 2014 revealed that only 20% were using BI applications in a public cloud then, and that more than 70% had NO plans to do that. Meanwhile …
The interest for Cloud BI has increased by 32% the past two years! This is a remarkable growth and we can track this trend on the BI market as well. Recent startups like e.g. Algorithmia, H2O.ai, Confluent, AtScale, Cazena, Wavefront, or RJMetrics are offering wide range of Cloud BI based advanced Analytics services (incl. SaaS BI), embracing Big Data and real-time (stream) analytics, offering top-notch BI tools and tailored BI apps for you… and more. But also megavendors like Oracle (BI Cloud), Microsoft (Azure/Stream Analytics), IBM (Cognos Analytics on Cloud), SAP (BO Cloud), Informatica (Cloud Analytics), SAS Institute (Cloud Analytics), etc. are investing heavily in their Cloud & SaaS BI portfolios. For instance, speaking at Oracle OpenWorld 2016 recently,
Larry Ellison emphasized Oracle’s multilayered Cloud approach (three complete cloud tiers, applications and platform as a service, as well as IaaS) ensuring high compatibility between the cloud and on-premises systems. Of course, this wasn’t only about BI but it’s even more striking because of that. King Cloud is clearly here to stay!

 

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So what’s in it for you? Simply that today you can easily rent sophisticated Analytics capabilities and start using them at once whenever you need that. Building your own capabilities of the kind in-house would normally take years and substantial upfront investments in HW/SW/facilities/staff… etc. Also, as an owner, you will have to endlessly upgrade and maintain your own BI stronghold yourself… It’s yours forever! So I just wonder… How many years would you drive the same car or use the same smartphone, even if meticulously maintained? So why more than 70% of the companies still maintain their own in-house BI solutions?

It’s mainly about the data (apart from the obvious historical and cultural hurdles). Would you dare to hand over your data to a 3rd party outside your company castle walls? As we saw recently with the Sony hack, online files can be compromised. How sensitive are your data and projects? How good is your virus protection and firewall? Security is always a major concern. And what about the legacy BI that you already have in-house? Servers, databases, licenses, arrangements… Are you ready to throw all that away and become a BI tenant instead?

Increasing number of companies actually do that … at least for some of their data. The trend is steady but its take-up pace has been a bit slow so far. Yep, Cloud & SaaS BI have been around for years. So what’s the deal?

It’s essentially a question about trust and comfort. If the deployment of Cloud/SaaS BI is too difficult or if you don’t feel that you can rely 100% on the provider (long-term), then you probably won’t go for it. That is, assuming that you already have a solid business case (i.e. it’s profitable for you) and you’re getting your (long-term) business & operational requirements covered. Clearly, this alone is not enough.

Guiding lines for successfully deploying rented BI services in the Cloud are widely available on the web, although offering somewhat varying content quality (as usual). Last year, John Myers from EMA released an excellent WP on Analytics in the Cloud. You may want to check it out. It’s very comprehensive and detailed. I’d like to supplement here with a few practical guidelines shaped as a quick informal checklist. The guidelines are presented in no particular order (priorities may vary in each case), and you should make your own assessment of what the critical factors for your business are.

Practical guidelines when considering Cloud & SaaS BI (with focus on the essentials):
How well understands the vendor your business and data? (do they speak your business language?)
• How easy is to define user roles and assign new users with different access & usage rights? (usability)
• How advanced and future-prone are the Real-time BI & Live Analytics offered? (for which data?)
• Who is responsible for moving the data and who owns the data interfaces? (the vendor or you?)
• How will potential data quality issues be identified, addressed and resolved in a timely fashion?
• Are you comfortable with the (data) security and the recovery options? (tested all critical use cases?)
• Is there a satisfactory SLA/OLA included in the offer? (covering all your business requirements)
• Have all costs been included in the offer (i.e. no hidden/unclear factors driving potential cost creep)?
• Have you ensured a «try before you buy» pilot setup to test the actual capabilities and function?
• Who is responsible for launching new BI releases and what fallback options are available? (tested?)
• How and by whom will the delivered performance be measured, evaluated and adjusted as needed?
• How easy is to up-/downscale the BI capabilities you will be using and how fast can this be done?

Other key considerations like the vendors’ financial situation, prices, # of customers and their testimonials (always talk to references!), local support capabilities, track record, vision and future strategy etc. are ALL very important and must be considered too as a standard. Such considerations are not on my list because these make a regular part of any potential contract assessment so I assume that everybody would be doing that routinely as a part of the RFI/RFP process or similar. Ok then, what’s next?

Ultimately, we are clearly moving towards Cloud & SaaS BI. But how fast? Nobody knows for sure but that’s not as important. You should prepare smart strategies for carrying out the transition, and get ready to go. Or even go ahead with it if the timing is right and you have the right offer in your hands. Even though the HW/SW is getting constantly cheaper, the technology evolution is moving so fast that it’s becoming almost impossible and financially unviable to stay in the loop and keep your own BI solutions up-to-date on a competitive level. New technologies, new approaches, new tools, new knowledge, new data… what have you, is being launched almost on a weekly basis. Powerful reusable BI services driven and provided by specialized shared centers (in the cloud) make probably the most viable BI option for the future.

 

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Cloud & SaaS BI enable substantial advantages. It’s been written a lot about its benefits, both by independent analysts and by every single vendor involved. I’d like to summarize quickly here some of the key advantages, just to refresh your memory and recapitulate briefly the discussion so far. The Cloud & SaaS BI offer includes:
Agile, modern & powerful BI platform, quickly adaptable to business changes and new technologies
• Fast deployment & results, great mobility & self-service, and native access to Big Data & external sources
• Lower HW/SW/ICT cost/expenses (especially upfront) and lower risk (minimal TCO and capital bindings)
• Swift and transparent maintenance and upgrades with low/none impact for users and the business
• Extreme scalability in any direction including scaled pricing and multi-tenancy across the enterprise

This is a truly impressive value proposition! What are we waiting for? Well, we’ve already reviewed some of the key obstacles, both rational and irrational, and there’s more. Business transformations of this class require solid C-level attention and full commitment of the entire organization. This takes a lot of effort, time and maturity.

The emerging hegemony of Hybrid BI solutions (part in-house, part public cloud) may be the key to success. Legacy BI and data (safety) concerns force many companies to focus on Hybrid BI solutions combining their existing on-premises BI gear with fresh Cloud/SaaS BI muscles. For some companies, BI in the cloud merely supplements the existing BI solution. Others want to extend its functionality or to replace/renew parts of their outdated BI environment. The BI market is quite aware of all that and there are plenty hybrid BI offerings from both specialized niche-vendors and the megavendors. E.g. Microsoft, Oracle and IBM etc. are vigorously promoting their extensive hybrid cloud capabilities. Sample specialized vendors may include Birst, Rosslyn Analytics, GoodData, and more. Decent web discussions about Hybrid BI are available as well. For instance, the well-known BusinessIntelligence.com site (sponsored by Domo) provides a number of useful Hybrid BI articles.

For many companies the Hybrid BI approach may be the only viable option moving ahead. Of course, synchronizing and keeping the hybrid BI parts in-house and in the cloud on consistent level is yet another challenge, on top of the above mentioned challenges for the in-house owned BI solutions. Nevertheless, it could be the best way out of your aging legacy BI burden at the end of the day. You need to know more and more about what’s going on out there; better yet you need to be able to predict what’s going to happen!
In order to stay insightful today you therefore need to be able to quickly renew your BI gear on demand, paying for no more than what you really need and use at any given time. Building private in-house BI fortresses rapidly become a legacy drain and unprofitable «money sink» these days. Just ask the veteran BI owners. Very large companies may still afford having their own proprietary in-house BI solutions and that’s fine if they really need those. The majority of companies today, however, are small to mid-size, including many new startups, and that trend is growing. These companies would definitely be able to benefit best from renting their BI/Analytics gear in the cloud, rather than building their own costly BI solutions in-house. Especially the Internet generation of new startups with no legacy gear in their backpack should consider renting BI services in the cloud.

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So think twice about your future BI options before taking the next step! And what’s coming next? «Shared Economy» BI services? Businesses helping/servicing each other and/or exchanging BI/Analytics know-how and analysis algorithms & results for a modest fee? Who knows! Just stay tuned and watch out for the relentlessly rising Cloud & SaaS BI! That is, if sustaining superior analytical insights in the future is important to you.

Willy Koulichev, 1o1 BI

About Willy Koulichev

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Willy has over 25 years experience as a strategist, trusted advisor, solution architect, SME and project manager in the areas of Analytics, Business Intelligence, Enterprise Data Warehousing, and Enterprise Information Management, including Master Data Management & Metadata, Data Quality, Data Integration, Data Governance, etc. Willy became the Accenture’s Nordic IM Lead (2002) and then their EMEA BI Lead (2007), when he decided to accept the position as the Nordic IM Executive Director at EY (2010). He is one of the founders of NextBridge Advisory (2013), and currently CEO of his company 1o1 BI. Willy is also a member of several professional organizations including TDWI, DAMA, and was a Chairman of the National Jury assigning the yearly BI Award in Norway 2006-2011 (jury member since 1997). Willy is a highly profiled keynote speaker at Executive Seminars and Conferences, and has contributed numerous interviews and articles as well.cutive Seminars and Conferences, and has contributed numerous interviews and articles as well.

About Arne Rosness

Arne er redaktør av BI-blogg.