Wednesday, July 18, 2007

On-Demand BI SIG Presentation

Last night Ken and I presented at the Business Intelligence SIG. Thanks to Paul O’Rorke and Richard Taylor for the opportunity. There was clearly a lot of interest in software-as-a-service and the shift to on-demand in the BI market.

The net of my message is that there are 5 primary drivers of on-demand BI:

5) “Date a fad, marry a trend.” (A favorite expression of Dave Kellogg.)

Here I spoke about the momentum on the salesforce.com AppExchange in the Analytics category. Last I counted there are 46 applications (many free dashboards) and 36 partners in this category alone (check out a webinar on the category here). Most of the traditional on-premise BI market vendors have announced on-demand strategies (see why I believe this will be difficult for them here) and this model is truly taking off with customers. As for the AppExchange in general, according to the recent partner presentation, there have been over 29,000 customer downloads to date. This means a third of their customers have complemented and extended their CRM implementation with AppExchange solutions. Definitely a trend not a fad!

4) Because Gartner said so!

Here I quoted some of the statements by the industry analysts:

“By 2011, 25% of new business software will be delivered as SaaS” - Gartner, September 26th, 2006
By 2009 40% of software will be delivered as a service, Triple Tree SaaS Update, September 2006.
Also check out Sandhill.com for some great articles like this one about on-demand.
The BI analysts are also starting to take note. Just check out some of the attention LucidEra has received in the last few months.

3) OLTP –> OLAP

The on-demand focus has been on transactional applications - managing sales, processing accounting transactions, providing customer service, managing your supply chain, executing marketing campaigns, managing HR, etc. History, supply and demand bode well for on-demand BI to soon follow. Organizations need insight across disparate systems - whether the data is on premise and “in the cloud”.

2) Simple, Simple, Simple

In my experience, business people want simplicity and flexibility, fast access to information, and a zero-training interface. People want to make data-driven decisions and they want to manage performance, but the barriers to making this happen today are way to high. The majority of time spent in traditional on-premise BI deployments (if you happen to have a decent sized IT department) is on data integration and data quality, managing security and access, architectural design, reducing costs and managing expectations. Salesforce does have a good whitepaper on this idea of a Chief Innovation Officer, but when it comes to analytics on-demand, people want a solution that is simple to set-up, simple to use, and simple to buy. (Check out the LucidEra Forecast-to-Billing demo as an example.)

1) It just makes sense!

Here I talked about customization, not configuration and adoption. The sad fact is that in most companies, large and small, people are still stuck using printed/static reporting and emailed or faxed reports. Most are swimming in “Excel Hell” and dealing with “shadow IT departments”. The other sad fact is the cost of traditional BI solutions. Once you figure out your connector, integration, cleansing, storage, and front-end reporting and analysis strategy you own the system and you own the problem. You also own the upfront costs, consultant fees, and a licensing model that does not represent your actual information access and usage. We believe that on-demand BI represents a better way.

With so many BI-savvy people in attendance, this lead to a lively discussion. My question to you is what is your top 5? Do you agree with mine? Are you excited? Skeptical? What else do you need to know?