SaaS BI will be big in 2010

Analysts predict on-demand business intelligence will outpace on-premise applications this year

For businesses that have just a handful of packaged applications that haven't been heavily tweaked, pushing information from them into a SaaS BI application should be fairly straightforward.

However, if a company has a wealth of customized applications and data models, the time and cost savings presented by the SaaS deployment model are sunk. That's because it would be necessary to expend plenty of effort cleaning up that data for use in the BI application. Forrester estimates that data preparation can take up to 80 percent of a typical BI project.

"In such situations you have to ask yourself why it would not make sense to just go the last mile, and create an internal BI application, leveraging all the clean data and metadata you’ve already created," Evelson wrote.

Forrester's report goes on to make a plethora of recommendations about how to choose a SaaS BI vendor, whether it's a platform giant like Oracle or one of the dozens of pure-play vendors in the market.

An application's breadth of functionality should be fully considered. Some customers may only need an application to pump out reports and dashboards. But full-featured BI software adds extras like text analysis, ad-hoc querying and individual workspaces, the report states.

Potential hidden costs present another problem. While SaaS typically provides the benefit of lower up-front costs, some application vendors may require customers to buy additional licenses if a BI application is going to access it, Forrester notes.

Security could be another deal-breaker. Beyond general queasiness with hosting potentially sensitive data on someone else's server, there are regulatory hurdles as well. Some countries don't allow certain types of client data to leave its borders, Forrester notes.

DMA, for one, was not concerned about security issues, since PivotLink meets the SAS 70 Type II auditing standard, Evelson added. "I would expect they do a lot better at protecting data than other companies. Their business model dictates it."

Finally, as with every emerging industry, there are more winners than losers. Your SaaS BI vendor could go out of business, as startup LucidEra did last year.

Therefore, a plan B is a must, according to Forrester. Companies should not only place the application's source code into escrow, but also periodically test the process of moving data in and out of the system or to another BI application.

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Tags business intelligenceForrester Researchsoftware-as-a-serviceDMA

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