To-date, no one has proved that hosted (cloud) BI is a sustainable business. None of the startups doing this have skyrocketed (yet?), and more of the larger players (Tibco included, in my opinion) are joining the effort on marketing hype alone. I doubt if they really know how they're going to be making money out of it.
All that being said, would I use a cloud/hosted BI service? In spite of its promise in terms of cost of ownership and easy deployment, the answer to that is an emphatic no. There are several reasons for this and they all revolve around the following points:
One of the common problems typical business intelligence solutions suffer from is their heavy reliance on IT involvement - data warehousing, OLAP cubes, and even report creation and/or customization. The IT department quickly becomes a bottleneck and just as quick the effectiveness of the BI solution you paid so much for relies on you adding more (expensive) IT people to tend to requests. Otherwise you'd be frustrating the users and prevent the solution from expanding throughout the department or company.
Hosted BI solutions are simply hosted IT departments with an arsenal of home-made or 3rd party software. In theory, as long as your solution is not too complicated you could save some money on recruitments to your IT department, but if you thought internal IT can be a bottleneck, you can only imagine how an IT department who is located in a different city or country can respond to your requests (and other customers' as well!).
As long as I have an option, IT-centric BI (hosted or not) is not a good idea as it contradicts what BI is supposed to be. A fast and flexible tool for the business user. But if I need IT to support my BI efforts, I would rather they be close.
Privacy and Security
This one's a big issue for me. I'm not so much worried they'll get hacked, as I am worried about the vendor itself (I have trust issues, I know). I am a heavy BI user and wherever I work a lot of the secret sauce relies on how use BI is used and what KPIs are tracked. Taking all this information and putting it on the server of a BI vendor, just to find it in the next version of their product could turn out to be disastrous. BI gives a tangible form to a business strategy, and that is something I would want to protect without compromise.
Working with Data
You could call anything BI. But basic reporting aside, getting the real gems in BI always involves a lot of data, and it's usually not all in one place. These are the main hurdles you must face, before you can use some sort of a reporting/visualization tool (or even Excel) and extract the answers or insights you're looking for. The mere thought of doing all these ETL tasks over the WWW gives me the shivers. This process is gruesome enough without having to wait for data to be transferred over the internet.
Data Size vs. Cost
Hosted BI vendors charge you for the hardware they use. They have to in order to remain in business. It's commonly known that BI solutions typically require sturdy hardware, particularly with strong multiple CPUs and dozens of GBs of RAM.
The CPU and RAM requirements for a solution are pretty closely bound to the amount of data being stored and queried. Because of this, with a hosted BI solution there is a very clear choice you need to make - pay a lot of money to perform direct queries of medium-to-large data sets hosted on the expensive cloud machine or limit the amount of data you store thus damaging the scope of business intelligence you will be doing.
This is a choice I prefer not to make.
By: Elad Israeli | The ElastiCube Chronicles - Business Intelligence Blog