In our global economy business intelligence and analytics are important tools that help organizations discover important market intelligence  while keeping an important focus customer concerns. 

Organizations must therefore continue to build out BI and analytics systems and solutions to remain a competitive advantage in the industries in which they compete. Many of these BI solutions are homegrown and keep getting more complex and difficult to maintain and operate. The trend indicates that many organizations are actively moving these systems to the Cloud model to assist in the management and maintenance of these core systems.

Approximately 30% of organizations either already use or plan to use cloud or software-as-a-service (SaaS) offerings to augment their core business intelligence (BI) functions, according to Gartner.

According to a recent survey of 1,364 IT managers and business users of BI platforms in Q4 2011, only 17% of organizations have replaced or plan to replace parts of their core BI functions with cloud/SaaS offerings.

“Business users are often frustrated by the deployment cycles, costs, complicated upgrade processes and IT infrastructures demanded by on-premises BI solutions,” according to  James Richardson of Gartner. 

“SaaS- and cloud-based BI is perceived as offering a quicker, potentially lower-cost and easier-to-deploy alternative, though this has yet to be proven. It’s evident that, despite growing interest, the market is confused about what cloud/SaaS BI and analytics are and what they can deliver.”

Gartner has identified three main reasons for the adoption of cloud/SaaS offerings for BI, analytics and performance management:

The use of SaaS BI may lead to faster deployment, insight and value, particularly where IT is constrained by existing work and/or limited budget so that it cannot respond to demands for information and analysis as quickly as the business requires.

2. Cost concerns

The cost dynamic differs between on-premises and SaaS models. Software purchased as a service can usually be expensed, rather than capitalized, on the balance sheet. Buyers often think that SaaS is cheaper, but the reality is that this is unproven. Gartner's cost models show SaaS can be cheaper over the first five years, but not thereafter. The long-term benefits lie elsewhere — in terms of cash flow, reduced IT support costs, etc.

3. Lack of available expertise

Instead of disrupting the enterprise BI platform and corporate performance management suite market, a more likely scenario is that SaaS and cloud-based offerings will tap into new opportunities — e.g., with midmarket companies that have yet to invest in BI, or by offering domain-specific analytics.

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