Sunday, July 18, 2010

Would I Use Cloud Business Intelligence?

This post was inspired by the latest announcement made by Tibco, that they are providing SpotFire Silver - their cloud-BI offering - free for one year. Every few months, another BI player announces such a hosted BI service/product. This comes in addition to number of smaller companies that focus on these types of hosted solutions such as Gooddata, Birst and PivotLink.

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


  1. firstly, congratulations on your funding activities!

    secondly...interesting post.

    I'm of the opinion that the on-premise vs cloud debate for the BI market is largely a redundant one.

    By that I mean, there's arguments for both sides, but neither really solves the problem with BI implementations...that being (I think somewhat to your point) that the challenge is still very much an IT one...and I think mainly focused around customer data.

    I've worked for the BI industry for over 10 years and have seen vendors make strides with functionality, scalability, flexibility (or any other ...lity!)...but the bottleneck in implementations still appears to be sorting out the customer data to feed these systems...and once you sort it out initially, you then have to make sure it stays sorted and continue to manage change.

    The vendor that can fulfill the promise of making BI a business application and not constrained by IT, will, in my opinion, prosper...I don't believe throwing the current technology into the cloud is the answer.

    Mike Smitheman
    BI professional

  2. Thanks Mike. We got funding exactly to help fulfill this promise. I believe we're on the right track, but there is still work ahead.

    I agree that the debate is probably more philosophical than practical. But one has to battle the army of cloud marketers making so much noise somehow :-)


  3. ...I sensed that was your goal and it's refreshing and exciting to see a vendor putting the effort in at that level rather than pushing out "another bit of end user functionality that never gets to be used"!

    I understand having to fight the battle though and not missing out on opportunities because of hype! If it were me, I would continue to fight it in marketing and focus your efforts where you are, as I believe if you succeed that could be the game changer in BI.



Total Blog Directory Technology Blog Directory Business Intelligence Directory