Is cloud-based business intelligence a safe bet?

Cloud-based business intelligence has its attractions, especially for SMBs having a hard time supporting any BI in-house. But don’t forget to ask some crucial questions.

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There are a growing number of vendors offering cloud-based business intelligence (BI) solutions, especially targeted at small- to medium-sized businesses (SMBs). On paper, these solutions are an obvious thing to consider, but you do need to be a bit cautious as you evaluate them.

SMBs are the businesses least likely to have on-staff BI expertise, the least likely to want to maintain a large BI infrastructure, and the ones most likely to outsource this kind of activity. So cloud-based BI seems to make sense for them. But there are still questions you should ask. For example, how will they charge? Many vendors charge based on the amount of storage you’ll need to use in their cloud, along with fees for each user who accesses the system. It can be difficult to accurately estimate storage needs -- keep in mind that these solutions need to copy your data into their cloud in order to make the BI system work. Which brings up another point: are you comfortable storing your data in someone else’s data center? What policies does the vendor have in place to protect your data, and what guarantees do they have in place to ensure your data remains your data?

Cloud-based systems of any kind -- not just BI -- tend to focus on providing a “one size fits all” offering. Sure, these services can come in various editions with different capabilities, but in the end everyone who uses the service will be getting the same features. That may be fine for a customer relationship management (CRM) application, or for email, but for some companies BI is a bit more personal. A cloud vendor might be able to provide some customization -- say, for dashboards and reports. Deeper customization, however, often comes only with a purpose-built, on-premises solution. Of course, that on-premises solution is likely to have a much longer implementation time, whereas cloud solutions can often have you up and running in days. A cloud-based BI system may only work with specific data sources, such as with a specific CRM solution or accounting packages. Just make sure that all of the data repositories you need to include in the BI system can be supported.

There is a middle ground that offers a faster start-up time and SMB-targeted ease of use, as well as more customization and local control: SMB-tailored “prepackaged” BI solutions. If you’re considering cloud-based BI, you owe it to yourself to consider these “private cloud” products. However, an on-premises solution of any kind will carry some overhead in the form of server maintenance and management, which a cloud solution would not.

The biggest question for any cloud BI vendor, however, is reliability. Not so much around whether the service will be up when you need it, but more around whether the vendor will be around in five years. An orphaned on-premise solution might not be supported, but it’s still usable. The cloud BI market is new, competitive and dynamic -- and a defunct cloud solution leaves you without any BI service at all, until you hook up with a new vendor.

It’s too early to call cloud-based BI a “safe bet,” but it’s definitely in the running. Consider your specific needs, your corporate tolerance for being on the bleeding edge, and the reliability and reputation of the vendors you’re considering, and you can at least achieve a “reasonable bet.”

ABOUT THE AUTHOR

Don Jones is a Microsoft MVP Award recipient, and is a Senior Partner and Principal Technologist at Concentrated Technology, an IT education, strategic consulting, and analysis firm. You can reach him through the company Web site, ConcentratedTech.com. 

This was first published in March 2012

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