by January 12, 2010 0 comments

Enterprise business applications like ERP and CRM were the buzzwords at the
beginning of this decade with organizations jumping on the bandwagon to
implement these solutions. Over time, enterprises felt the necessity of
reporting and so the tools for it, and thus BI solutions became a priority for
businesses. Last year, as per Gartner’s survey, BI was on the top to-do list for
CIOs. And as a result, the industry has been witnessing organizations
implementing BI Solutions. Although, during these years, another technology that
also brought a revolution was Software-as-a-Service. Enterprise applications
like ERP, CRM, HRM were offered as On-Demand services. Now BI has followed the
suit, and is being offered as a service.

Today, the market for BI as a Service is a miniscule as compared to the
overall BI platforms market. However BI as a Service is set to gain traction and
will largely be driven by cost, time and accessibility factors. As we know, in
the On-demand model, the cost shifts from being a capital expense to operational
expense, and the solution can be delivered quickly and efficiently. Industry
verticals like retail and manufacturing are more likely to adopt BI as a service
model. Even the midsized organizations who have limited IT budgets and resources
that need a quick deployment of BI platform would be adopting SaaS based BI
model faster than larger organizations.

Does BI on SaaS make sense?
BI as-a-Service or “BIaaS” brings forth terms like “On-Demand”, “Pay as you
grow”, “Cost Effectiveness” and so on, that are synonymous now for any SaaS
based business application offering. For an organization that is looking to
implement a typical BI solution would mean to deal with issues like
datawarehouse, data mining, master data management, etc. While with BIaaS, the
organization won’t have to bother about all those and just have to subscribe to
the service, and they would be all set to go. Benefits like quick deployment
time, reduces costs and limited IT resources requirements for implementation and
management are the primary benefits that a business reaps from a SaaS based
service. In times when organizations are eyeing to be more cost effective,
moving infrastructure use from a capital expense to an operational expense would
help an organization in cutting down overall cost of BI implementation by almost

Most BI as service offerings are hosted applications. The customer has to
therefore provide data to the service vendor, which raises the questions on
data security. You must ensure that only that data that is required for
specific reporting is provided to the vendor- for ex, if granular level
financial information is not required, then the same should not be provided.
Stringent Non Disclosure Agreements have to be formulated and strict data
governance policies and procedures need to be followed. Process integrity
for each process needs to be defined and maintained. Data encryption and
dedicated bandwidth are also important to ensure faster adoption of the
On-demand BI model. Typically aggregate level reports and dashboards that do
not warrant any analytics (like the ability to create ones own report or
have multi-hierarchical drill downs) can be offered on the SaaS model.
Operational reports that generate a huge volume of data or reporting for
legal and compliance purposes will tend to follow the On-premise BI model.

N.K.Subramaniyam, Executive Director, Operations & Technology,

BIaaS comes as an answer to an organization for cost effective and fast
deployment for BI solution. The advantages of BIaaS are obvious for an SME. By
knowing the predictable monthly costs of BIaaS offering instead of large upfront
expenditure of BI solution, small businesses can for first time acquire rich
functionality of reports and dashboards without having to spend a fortune if
they would have opted for an On-premise BI solution, and thus improve decision
making through broader, easier, timely access to accurate data.

BIaaS, besides mid-sized organizations, would be advantageous for many
enterprises across industry verticals too. But that may not be the case with
financial services. While financial services industry has been the early adopter
of Business Intelligence as a practice, moving to the on-demand model from the
on-premise model will need a paradigm shift in the business intelligence model
as there are concerns on data security and regulatory and compliances issues
with putting data with a third party server.

How would BIaaS work?
BI as a Service has several options. The service vendor can set up his own
BI infrastructure and provide that as service following a typical SaaS model.
While, someone can provide a platform such as of Amazon or Microsoft Azure to
host BI application, using these technologies, the customer can either deploy
full stack data warehouses, or pay based on transactions.

Fast Facts

  • By 2010, 20 % of organizations will have an industry-specific analytic
    application delivered via software as a service (SaaS) as a standard
    component of their BI portfolio.
  • As of now, BI services-based offerings account for less than 5% of the
    overall BI platform market revenue.
  • Amongst the mega vendors SAP, Oracle and Microsoft; currently it is
    SAP’s product that has significant presence in BI as service offering
  • In India, Saksoft is providing on-demand BI solutions for retail
    banking and credit cards, whereas MindTree is soon going to offer BI
    services on SaaS model.

In effect when a customer subscribes for a SaaS offering it is understood
that the organizational data would be hosted at the service provider’s
infrastructure. This somewhat does not hold true for BI SaaS model. This is
because, SaaS BI will usually work on data that is provided to it, it would
either be uploaded or accessed from a system, be it an on-premise or another
SaaS based system. This means that, an organization that subscribes for the BI
service could be having BIaaS as part of a bouquet of enterprise applications
that the vendor offers, or alternately the service subscriber can also upload
the data as files on which the SaaS BI would do the reporting job. The exchanged
data could be from Oracle database or from Excel file; it can be of flat file
format too for instance CSV format.

The ability to exchange database files or integrating on-premise application
with the SaaS BI negates the assumption that SaaS BI would work on SaaS based
applications only. The con for BIaaS as compared to

On-premise BI would be that as a customer has to upload the information on
periodic basis, the reports and data analytics does not reflect real-time
transactional information and hence a latency is there, which is not the case
with on-premise BI solutions.

BI On Demand offers similar features to the on-premise BI solutions thereby
giving customers the choice in how to deploy and consume business
intelligence. At the same time, the SaaS offering can be fully integrated
with the on-premise applications thereby ensuring a comprehensive BI
strategy that can develop and evolve with the customers’ needs. Any business
Intelligence solution — not just a SaaS-based solution – would require
integration across various platforms. SAP Business Objects solutions are
integrated across various platforms as well. For instance, the SAP Business
Objects On-Demand has a data integration hub which uses an automated process
to move data from an enterprise’s data sources into its own fully supported
and hosted data warehouse. Incoming data can include both on-premise and
third party sources. Further it also allows you to build a universe on top
of the data warehouse that assigns business names to database objects.

Sanjay Deshmukh,
VP, Business User and Platform, SAP India

Alternately a service provider may also offer standalone BI service as a
“Managed Service” wherein the information is available in the customer’s
On-premise data warehouse, and the vendor will generate the reports and
dashboards that can be accessed by the business users on-demand. Here the data
is not stored in the cloud, but remains in the customer’s data centre and the
vendor just offers data management services.

BIaaS offerings
Software-as-a-service (SaaS) BI, On-Demand BI, Subscription based BI, Hosted BI,
BI in the Cloud are all different terms that go hand in hand. The low-cost
offering of BI solution on a SaaS based model does not mean slimmed down
features or below par performance when compared to the traditional on-premise BI

Like on-premise BI solutions, the On-Demand BI offerings also offer analytics
capabilities besides reporting facilities. While BI tells us ‘what’ happened,
Business Analytics tools that rely on statistical and quantitative analysis and
predictive modeling, and helps to understand ‘why’ a certain thing occurred or
‘how’ a certain decision would impact. Having such BA capability helps an
organization to have better decision making capacity with the dynamic business

In contrast to self hosted BI solution, where scaling up can involve issues
like budget approval, equipment purchase, and operations overhead. The BIaaS
facilitates affordable and easily available infrastructure with specialized
managed computing resources that are provided by the service vendor. These
resources are available as ‘always on’ and are ready to scale as per the users

Security Concerns
BI is something that incorporates data privacy and validity. With the
concept of BIaaS, data validity, data quality and data security becomes a major
challenge. Apart from that organizations are entrusting critical information to
the service providers that their data will be held secure and private. An
organization would be using BI to evaluate their KPIs. These KPIs give gist of
the organization’s business performance.

BI as a Service” trend is suddenly accelerating. The primary driver being
that low capital expenditure budget available. So the way you place BI as a
service offering is to structure it as operational expenditure rather than a
capital expenditure. But five to six years back, you had to have a capital
expenditure allocated for the BI project, since most of the organizations
didn’t have the capability for that, now an operational expenditure is the
solution for them to adopt BI. And in that scheme of things, BI as a Service
where you just pay as you use is gaining momentum. Primary driver for this
acceleration being; one, ability to bring down the ownership cost. Second,
if you segment BI as a standard reporting related application or data-mining
related application most organizations do not have capability to buy an
expensive statistical tool so they are better off leveraging BI on a SaaS
model. In the current matured model in which BI as a Service is emerging is
where the information will reside with the service providers.

, General Manager, Knowledge Services, MindTree

An organization would not be willing to host such sensitive information with
service providers. Hence, convincing organizations to share their data is a key
challenge. Service providers have to assure them for data privacy and security
along with high percentage of system uptime. Organizations would still be
skeptical of hosted offerings, but many who had expressed apprehensions earlier
end up choosing an On-Demand solution, mainly because of cost advantages. While
others have adopted the On-Demand model as they have found it to be a better fit
for their business requirements. An on-demand business intelligence solution
provides tremendous additional benefits of scale and efficiency, lower cost, and
better consumption of on-demand derived data sources. If security is a concern,
that’s all the more reason to turn to a trusted provider and market leader in
the BI as Service domain.

SaaS technology has advanced rapidly in recent years and customers are
becoming more mature in their acceptance and adoption of these solutions. If we
compare SaaS with e-commerce, a few years ago we would never have submitted our
credit card details online but now we do so as part of everyday life and much of
our banking is also done online. This is attributed to the fact that service
provider himself ensures the utmost protection of their customers’ information.
BIaaS is expected to bring in the change to the economics of Business
Intelligence. It will make BI and analytics available to all operational users
of an organization and hence and will promote pervasive use of BI.

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