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BI SaaS: A fit for some, others not so sure

BI in the cloud raises questions, possibilities for CIOs here at Information Builders user conference in Nashville.

NASHVILLE -- Information Builders Inc. (IBI) may not be the first to propose subscription-based business intelligence software, but the company's plan to offer its BI suite on the Amazon Elastic Compute Cloud (EC2) is creating a buzz here at the company's user conference.

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The offering, which will target midsized organizations and/or those with nascent BI programs, makes sense in terms of cost savings for smaller shops, users said, but it also raised some concerns. For example, some saw data integration and protection issues with an application that requires so much data from critical on-premise systems.

"WebFocus would live in the cloud, but where does it get the data it needs? From our ERP system, which is not going to live in the cloud," said Chris Brady, CIO at 450-employee Dealer Services Corp., a Carmel, Ind.-based financer for car dealerships.

Information Builders joins mostly open source BI players – Pentaho Corp., OpenBI LLC and Compiere Inc. -- in going down the EC2 path. Other companies offer BI Software as a service, or BI SaaS, with the SaaS provider, or one of its colocation partners, doing the hosting. Good Data Corp., Kognitio Ltd., LongJump, LucidEra Inc. and 1010data Inc. are a few BI SaaS payers, according to Boris Evelson, an analyst at Forrester Research Inc. in Cambridge, Mass.

The benefits of the BI SaaS model are like those of renting any application: 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 a drawback is a lack of built-in integration with the rest of an organization's data and processes, Evelson explains in his report, "BI Belt Tightening In A Tough Economic Climate."

New York-based Information Builders is still testing the cloud environment at Amazon, according to IBI CEO Gerry Cohen. The SaaS business intelligence offering will come in three sizes, but the company didn't release details on the tiers, capabilities or pricing. However, it did say the minimum number of users would be 20 per month.

The monthly per-user fee would include testing, configuration and ongoing maintenance of the company's BI WebFocus server, including BI software upgrades, by Information Builders. To feed data to the virtual machines in Amazon's data center, customers would be able to either send it via FTP or give Information Builders access to their corporate servers through the firewall.

Licensing also doesn't require a big commitment: Customers can give a 30-day notice to jump ship.

Although some current BI customers think the hosted model makes sense for those getting started with BI or those with few IT resources, they did express concerns about BI in the cloud. These include security (from risk management to meeting state and federal regulations), latency, integration problems and the question of who would ultimately be responsible for what, should a service-level agreement (SLA) come up short.

I see the cloud being useful for testing and development, but I don't see us really doing anything major in the cloud for another two or three years.
Jim Honerkamp
CIOThe Hillman Group
"I'm the one who has to answer when we don't meet an SLA, so who's ultimately responsible for that? There's a lot of unanswered questions with the cloud," said Andy Hanna, head of document management and reporting at the Royal Bank of Canada in Toronto, Ontario, which has 70,000 full- and part-time time employees.

For Jim Honerkamp, CIO of The Hillman Group Inc., a Cincinnati-based manufacturer of fasteners, numbers and signs and engraving systems that services large retailers such as Home Depot as well as mom-and-pop hardware shops, putting BI and other applications in the cloud is enticing.

IT infrastructure is an anvil around his neck that he would like to get rid of. The cloud could offer an answer to that and there are applications like email that are just a waste of time for IT to have to manage every day. A couple of people on his staff are also testing Google Docs for the company.

Honerkamp said he's also taking a serious look at Information Builders' BI SaaS proposition for use as a BI test-and-development environment. He added that he still has questions in many areas, as others do, such as what the cloud means in terms of adding another latency layer and licensing different parts of the infrastructure such as databases.

"I see the cloud being useful for testing and development, but I don't see us really doing anything major in the cloud for another two or three years," Honerkamp said. "There's still too many unproven rough edges."

Let us know what you think about the story; email: Christina Torode, Senior News Writer

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