Disruptive Change in Business Intelligence

In the past weeks I've worked with Good Data as a marketing consultant. I've spent a lot of time studying their value proposition, and their technology. The market they are in – Collaborative Business Intelligence – is very interesting.

The BI market has several strong established players, and most of them have been acquired by the industry giants: Business Objects by SAP, Cognos by IBM and Hyperion by Oracle. For now, they will still rule the Fortune 500, but there are new competitors coming up from the bottom. That is one of the characteristics of disruptive change, according to Clayton Christensen's book 'The Innovators Dilemma'.

What is new about vendors like Good Data? I'd say there are a couple of aspects:

• SaaS Business Intelligence model (rather than on-site software)
• Focus on user experience and collaboration
• Pre-built vertical applications

These aspects improve the ROI of cloud business intelligence projects: it is less costly to roll out because of the on-demand model and the pre-built applications, and user adoption is higher because of the user friendliness and collaborative features.

Actually the best case for online business intelligence is made by Evangelos Simoudis on the Sandhill.com blog. He indicates that online systems are better at aggregating data from various locations, from inside and outside the company. Only this will create true new insights.

Also, a cloud-based analytics system is a natural for social features. Collaboration is taking place all over the web. Whether it's a generic social network like Facebook or MySpace, a white-label social network on Ning, or a micro-blogging service like Twitter. This has the potential to transform BI from a solitary activity to a collaborative process.

An additional benefit is more operational in nature. True cloud-based systems are multi-tenant: in other words, only one instance of the application is used by multiple customers. This is done in such a way that the data for each customer is totally isolated, but application maintenance is much easier. Even better, the actual end-customer never has to to application maintenance: the new features simply appear in the product.

Evangelos mentions a total of 12 points in favor of on-demand business intelligence. So if this is of interest to you, please be sure to read his full article.

Another recent article about the pros and cons of hosted BI was published on TechTarget.com. They are quoting a Forrester report by Boris Evelson. As the benefits he mentions: “less reliance on internal IT, anywhere access to the application, pay-as-you go pricing with no up-front cost and vendor management of the application and infrastructure.” But as a drawback he mentions “lack of built-in integration with the rest of an organization's data and processes”. The original report can be accessed on the Forrester website (subscribers only).

Conclusion

In this post I've tried to summarize some benefits of cloud-based business intelligence software, with links to other relevant articles. Please let me know if you have additional suggestions.

Other links:

• analytics service
• analytics dashboard