Putting The Costs of BI In Perspective

Successful business intelligence (BI) solutions serve as many business users as possible. As more users use it, the more value the solution brings.

However, if you’ve had any experience with BI, you must have noticed that as the number of users grow – so does the complexity (and consequent cost) of the solution. This is a fundamental reality in the traditional business intelligence space, although many startups in the space are attempting to change it – each according to their own vision and understanding of the space.

But why is buying a BI solution for dozens or hundreds of users so much more complicated than buying a solution for a select group of power users?

Perspective #1: The Cost of Software Licenses

People often think that the answer to this question lies in software costs, but in fact software costs are usually the red herring in the process of business intelligence costing.

It is obvious that the more users your solution has the more software licenses are going to cost. Therefore, you might be tempted to choose a vendor that sells software for 30% less than another vendor – but basing a decision solely on this is a big mistake as license costs have little bearing on the total cost of a BI solution, and hardly any impact on ROI.

Some proof to this can be found in open source. Open source BI provides (by definition) free software, and there is no shortage of open source BI tools/platforms. However, none of them are doing as well as the established non-open source vendors, even though they have been around since the beginning of the century. They’re having trouble acquiring customers, at least compared to commercial vendors. It is very easy to assume that if software costs were significant inhibitors in the BI space, open source solutions would be much more prominent than they actually are.

Another hint at this can be found in the ‘commercial’ (non-open source) world, where BI vendors do charge for licenses but will usually provide significant discounts on purchasing of large volumes of licenses. BI vendors do it for reasons that go beyond the obvious attempt to motivate potential buyers to expand their purchase orders. They do it because they realize the total cost of the solution – to the customer – grows significantly as the number of users grows, regardless of license costs (preparation projects, IT personnel assignment, etc). They need to take this into account when they price their software.

Tip: Pay attention to software costs, but there are way more important things to consider. You should really leave the license cost comparison to last.

Perspective #2: The Cost of Hardware

Two things that have great impact on the hardware requirements of a BI solution are the amounts of data being queried directly by business users, and the number of business users doing the querying concurrently. Depending on which technology you use, each user can add between 10%-50% to the configuration of hardware resources required (disk, RAM and CPU).

(For you technology geeks out there, there is an interesting discussion about this topic on Curt Monash’s blog. Check out the comments section, as it will also give you a good idea on what hardware configurations can be used, when different technologies are utilized)

The tipping point, however, is when your requirements grow beyond what can be fitted inside a single commodity hardware box (read: cheap off-the-shelf computer). If this limit is hit, you basically have three options, none of which are practical for most companies:

1. Buy a high-end proprietary server
2. Clustering / sharding
3. Build a data warehouse / pre-processed OLAP cubes

Unfortunately, BI technologies that were designed prior to the 21st century (RDBMS, OLAP, In-Memory Databases) don’t leave much room for innovation on this particular aspect. They were designed for hardware that was different than what exists today. So while there will always be a limit on what can be achieved with a single hardware box, with traditional BI technologies the threshold is too low to be feasible for most modern companies that both have large volumes of data and seek extensive usage at reasonable and consistent response times.

The good news is that this is not the case with new technologies that are designed specifically to utilize the modern chipsets that are available on any commodity 64-bit machine, and therefore get more (orders of magnitude more) juice out of a single 64-bit commodity box. Running dozens or hundreds of users on a single box is more than possible these days, even when data is in the 100s of GBs size range.

Tip: If you do not wish to spend loads of money on high-end or proprietary servers, and your internal IT department has better things to than to manage a cluster for BI, you should really give preference to technologies that would allow you to set up your BI solution on a single commodity box.

Perspective #3: The Cost of Starting Too Big… or Too Small

After talking to business managers, executives and other stakeholders, you’ve determined that this BI solution you’re considering has the potential of serving 100 users. How would you then go about calculating your project costs? This is where things get tricky, and where most BI buyers fail to protect their wallets. Making the wrong decision here is far more significant than any decision you make on software licenses or even hardware.

Even if the development stage of your BI project goes without a hitch, getting a hundred users to use any kind of software, in any company, is a challenge that is not at all easier than any technical challenge you will encounter during the various stages of the project. You could easily find yourself spending tons of money on the development and deployment of a complicated 100 user solution, only to find that only 15 of them are actually using it.

So instead of your total cost per user being reduced due to the ‘volume-pricing’ model, you actually paid much more – because each one of these 15 users absorbs the cost of the 85 others who find it utterly useless, too difficult to use or completely misaligned with their business objectives. You'd be surprised how often this happens.

The obvious way of dealing with this common problem is to start off small (10-20 users), and expand as usage of the system grows (assuming it will). But when it comes to traditional business intelligence solutions, there’s a catch - deploying a solution for 10-20 users and deploying a solution for 100 users are utterly different tasks and require significant changes in solution architecture.

Following this path will save you some cost on the software licenses you did not purchase straight off. However, if demand for the solution grows inside the business, you will have to re-design your solution – which would probably end up costing more than it would have initially.

Tip: The correct way of dealing with this challenge is to seek a solution that scales without having to re-architect the solution as usage grows. Buying more software and upgrading hardware when the time comes is relatively easy and inexpensive, while rebuilding the entire solution from scratch every year or two costs way more.

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By: Elad Israeli | The ElastiCube Chronicles - Business Intelligence Blog

There is still hope for Business Intelligence

A few months ago, I wrote an article about the relationships between business intelligence platform vendors and their distribution networks, and where these relationships are headed.

The key message in that article was that Value-Added Resellers (VARs) must understand that self-service business intelligence is where the market is headed – and adjust their business models accordingly. A company selling BI solutions based on another company’s BI platform will need to provide real added value to the customer in order to stay in business. In the not-too-distant future, this value will almost certainly come from industry-specific professional knowledge and experience (as opposed to purely technical expertise). More and more potential customers will no longer accept lengthy projects and, with the new software and technologies now emerging, it is no longer justifiable.

Winds of Change
The Israeli BI market ('the Pond', as it is referred to by the locals) is a good example of how the BI market looks like in most parts of the world. It’s packed with BI companies that are in fact service and/or placement shops and are forced, by their own out-dated business models, to sell to a just handful of high end companies (by Israeli standards). That, and the lack of decent tools, has just made it impossible for the market to evolve.  It just amazes me that in the 21st century, a few patched up software components are used to sell ridiculously long projects that end up in nothing, taking yet another bite out of the BI industry's credibility.

Yotam Aharonson, the CEO of New AspeQt - a known and respected BI integrator in Israel – recently published an article in local Israel media which finally made me feel like things are starting to change. In my excitement, I had it translated to English and posted below (the original Hebrew version can be found here).

I believe it stands for itself as an explanation and an argument.

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Self-Service BI: A Revolutionary Idea that has Become Reality
By Yotam Aharonson, New AspeQt

The King has No Clothes
In a world accustomed to thinking in terms of long and expensive projects, complex licensing models and long-term temporary employee placement, new voices are now being heard. System integrator New AspeQt has set a mission to itself - to bring into the Israeli market an insight that has already spread to quite a few markets around the world: there is a different way!

New AspeQt believes that the only way to deploy “business intelligence” in an organization, such that it will be possible to adapt to ever-changing information and business needs, is by enabling the organization to create and manage its own reporting and analysis facilities, while reducing dependence on external consultants. The combination of a system integration company that understands the value of this new approach, together with a BI platform that enables simple and flexible implementation, is a revolution in itself! (New AspeQt has found that the Prism BI application from SiSense is most suitable for this challenge.) For the first time, control is transferred into the hands of the customer from the very beginning of the process and remains there throughout.

Trapped in the Clutches of BI System Integrators
It would seem that for a BI system integrator to espouse self-service BI would be to shoot itself in the foot, or at least to harm its basic interests, namely, to sell work hours, the bread and butter of any system integrator. New AspeQt has a different perspective: While most integrators have, in fact, become employee placement companies which provide skilled BI workers to work at their customers’ sites, New AspeQt sees itself as a young and dynamic company which serves as a skilled in-and-out “commando”: New AspeQt transfers the required knowledge to the client’s employees, along with professional guidance, to quickly bring the client to full BI independence.

Many organizations evaluating the implementation of a BI solution mistakenly think that BI is a finite project. This fundamental misconception can cost a company a lot of money and, more importantly, create a “Gordian knot” of permanent dependency on the system integrator. An organization’s information and data needs in the business world are constantly growing and changing. Given this reality, dependence on an external provider will, at best, lead to ever-growing and accumulating expenditures. At worst, in an attempt to reduce these expenses, the organization may simply avoid further development and essentially lose their “business intelligence” edge.

If it Works for Yahoo and Cisco, Why Not for Me?
Many organizations in Israel and around the world have already chosen the do-it-yourself BI solution from Israeli software vendor SiSense. For a significant number of these customers, the person implementing the system was not even in the company’s IT department, but rather among the “BI consumers” themselves, such as marketing, operations or finance. All of these customers tried the software and its self-service method for a month with no up-front expense. They realized that the software’s promise is not just a marketing slogan, but a genuine reality. When the information consumer builds his own solution himself, there’s no chance that the solution will not fit his needs!

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By: Yotam Aharonson, CEO, NewAspeQt | The ElastiCube Chronicles - Business Intelligence Blog

Thoughts about Business Intelligence and the Cloud

Business intelligence in the cloud is a hot topic recently, as part of the hype surrounding the cloud in general. I am not a big fan of cloud BI and I have mentioned that several times. However the topic does merit discussion.

The advantages of the cloud over on-premises are pretty straight forward. However, as far as business intelligence implementations are concerned, the question to me was always whether the benefits outweigh the unique challenges the cloud introduces. If all business data was in the cloud, there was a definite case to make for implement business intelligence software in the cloud. But since most business data isn’t, the benefits of cloud BI are not as obvious.

The blogosphere and analyst community in the business intelligence space are not sparing any words on the subject. There are several startups in this space as well, such as GoodData, PivotLink and others. But is the business intelligence space really heading in the direction of the cloud? I believe the answer is no.

The main reason I do not believe that the BI space is headed towards the cloud (at least for now) is because business intelligence backbone technology doesn’t seem to be headed there. In fact, it seems to be going in the opposite direction.

If you take a careful look at the new technology promoted by the established business intelligence vendors like SAP, IBM and Microsoft, and even those promoted by slightly less established vendors (yet successful) such as QlikTech and Tableau – it is all technology that is either ‘desktop enabling’ technology or in-memory technology.

These technologies, in-memory in particular, aren’t very cloud friendly and weren’t designed with the cloud in mind at all. They are designed to extract more juice out of a single computer, but very hard to distribute across multiple machines as in the case in most cloud implementations. Also, to benefit significantly from these types of technologies, you need very powerful computers, a premise which goes against proper cloud architecture that dictates that computing operations should be parallelized across multiple cheaper machines.

On the other hand, the current cloud BI platform vendors are using the same traditional backbone technology the on-premises vendors do, and by that they suffer from the same drawbacks most BI vendors do such as complexity and long development cycles. And when these drawbacks come into play, whether the data is in the cloud or on-premises isn’t even the main issue.

Even if the ‘pure cloud’ BI platform vendors did develop better technology more suited for running BI in the cloud, it is still years away. So while you can use the cloud for some types of solutions (mainly around other cloud data sources) the fact of the matter is that the cloud BI hype is at least a few years too early.

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By: Elad Israeli | The ElastiCube Chronicles - Business Intelligence Blog

Business Intelligence Vendor Websites – How to Read Between the Lines

If you’ve begun looking for a business intelligence solution, you probably noticed very quickly that there are quite a few business intelligence vendors out there. Narrowing the overcrowded field of vendors in order to come up with your own business intelligence short list will usually start with a review of the vendors’ Websites. Armed with your short list, you can begin contacting vendors to receive proposals.

This article is going to help you discover some key differences between vendors based on what they share on their Websites – and what they don’t. Read between the lines while looking at BI vendor Websites to quickly figure out which business intelligence vendors are probably right for you, and which ones aren’t.

The Customers Page

Obviously, a business intelligence vendor Website without a page dedicated to featured customers is cause for concern.

Assuming the vendor does indeed have a Customers page, the first thing you should look for is whether the featured customers are big corporations or smaller companies. This is an important distinction because business intelligence solutions for big corporations often have very different functional (and other) requirements than business intelligence for smaller companies.  You should focus on vendors which sell to companies like the one for which you’re seeking a solution. If you need BI for an SMB, a business intelligence vendor that only lists Fortune 500 corporations on their Customers page probably won’t fit your needs. Their solutions are probably too complicated and/or expensive. Similarly, if you need BI for a large corporation and the business intelligence vendor only lists SMB customers, the solution may not deliver the functionality, performance or scalability you need.

The second thing you should look for is whether you recognize any of the customers listed on this page. Having recognizable names says a lot about the credibility of the business intelligence vendor. Well-known companies with recognizable brand names do not trust their business operations to just anyone. A business intelligence vendor with recognizable names on its Customers page is less likely to disappoint you than a company listing only unknown names.

The Case Studies Page

Reviewing the case studies on a vendor’s Website is a good way to determine whether the solutions the vendor provides were implemented in business scenarios that resemble your own. Most vendors should include at least a few case studies on their site.

It’s important to note whether the solution has been implemented in companies within the same industry as yours. Different industries will share many common needs, but there will also be special needs and requirements unique to each one. 

Another important thing to look for is whether the solution is being used in the same way you’d like to be using your business intelligence solution. There are several types of business intelligence solutions available – some are used more for reporting and some more for analytics. Some are maintained primarily by IT and some are designed for more hands-on use by business professionals. Case studies help you determine whether the solution can meet your goals and whether it can be used by the people you intend to use it.

The Partners Page

The Partners page is a great place in which to gather information about the vendor. You may think that the Partners page is mainly used for finding representatives in your own region, but there is a lot more you can tell about a vendor from this page.

One thing you should look at is whether the vendor has a long list of service integrators listed as partners. This is important because it says a lot about how difficult the solution may be to implement. 

While software vendors prefer to sell software licenses, service integrators typically make most of their revenue from projects they execute, charging by the hour or by the day. When a business intelligence vendor has a long list of service integrators as partners, it usually means that the solution they sell is a challenge to implement and/or requires extensive on-going maintenance and consulting. Otherwise, the service integrators wouldn’t see much business value from working with that vendor.

The second thing you should look for on the Partners page is whether the vendor has multiple software/technology vendors listed as partners. Typical business intelligence applications require several tools and technologies to be fully implemented, and when a vendor lists technology/software partners, it usually means they only provide a portion of the business intelligence stack themselves.

The Free Trial Download Page

Even though free trial downloads are commonly found in the software industry, they are not commonly found in BI vendor Websites.

There are two major reasons for this. The first is that 99% of the business intelligence vendors out there are not software providers, but rather service providers. As opposed to selling products, they partner with existing software/technology vendors to use their products as building blocks for implementing custom solutions.

The second reason for vendors not having a free trial available for download is their lack of confidence in your ability to quickly and easily use their software (due to it being too complex and/or because it requires professional services to get started).

Therefore, when a vendor does in fact have a free trial version available for download, it typically means both that this vendor is willing to sell directly to you (thus removing the mark-ups taken by third-party service providers and resellers) and that this vendor believes you would actually be able to use their software yourself. It also stands to reason in this case that you’re looking at dramatically shorter implementation times, without extensive third-party service provider fees.

The Services Page

Vendors in the business intelligence space basically have two ways of making money: through selling software or through selling services (e.g., consulting, implementation, maintenance).

It is very difficult for a vendor to successfully focus on both, as they require completely different staff and operations. Building commercial software in the BI space requires significantly deeper pockets than simply providing services which utilize existing (third-party) software. This is why the business intelligence space has very few vendors which provide end-to-end “productized” software and significantly more service providers who will custom build a system.

It’s important to understand that the total cost of owning a BI solution is rarely the cost of software licensing, but rather all the work that needs to be done in order to customize this software for your own needs. Therefore, if a business intelligence vendor presents itself as a software vendor, while having a wide range of professional services for sale, it should make you wonder what it is about their software that requires so many services around it. As previously mentioned, true software product vendors prefer to focus on selling licenses, not on selling services. It is very difficult to do both equally well and, from a vendor’s business model perspective, it’s wrong to even try. So business intelligence software vendors try to make their software as easy to implement in as self-service a manner as possible. Otherwise, they would have to spend more than they’d want on training, support and customization services.

The Pricing Page

Pricing pages are not something you often find on business intelligence vendor Websites. Those which do have pricing pages usually have some empty statements such as “contact us” instead of actual pricing figures.

Usually, business intelligence vendors do not publish pricing information because most of the actual cost of a system deployment will go towards the implementation and customization projects. These projects are very hard to price before doing extensive on-site analysis and estimating project scope. Therefore, the pricing would be meaningless.

For a vendor that actually sells software products, a typical reason for not posting pricing information is to hide the mark-ups their service integrator partners get on the deal. In many cases, the service integrator is the actual one doing the selling to the end customer and they enjoy margins which tend to be significant. Publicly posting the list price would prevent third-party resellers such as these from adding significant markup to the sale.

However, there are rare cases when a business intelligence vendor does post pricing on their Website. These are typically companies with unique business models and offerings, and by that fact alone they are worth your close attention.

The Online Community Page

Having an online community (via blogs, forums, etc.) is a very big benefit for customers in the BI space, as it allows you to leverage the experience of other users to accomplish tasks and solve problems. Regardless of which vendor you choose, you will always have a question at some point and it’s great to be able to get it answered without having to rely on the vendor’s official support channels.

Online communities also give you a good indication of how popular the solution is and what types of things people are doing with it. Generally speaking, your experience with a business intelligence solution will be much more fluent if you have access to the collective knowledge of an active online community.

When a business intelligence vendor does not have an online community, you should immediately be concerned about how much support will cost you and how quickly you will be able to get responses to your inquiries.

Good luck on the search for your perfect business intelligence solution!

Provided as public service to the business intelligence customer community by SiSense, a BI vendor leading the way to a faster, easier, better era of business intelligence.

Choosing a BI Vendor - Making the Short List

There is no shortage of business intelligence vendors out there. They all claim to be powerful, easy-to-use, flexible and affordable. So how do you pick the one that is right for you?

In order to be able to choose the right BI vendor from the abundance out there, the best way is to follow high-level, yet restrictive, criteria and only then compare them on a feature-by-feature basis. Here are a few tips that will help you do that, as well as avoid common mistakes typically made when choosing a BI solution. This is the 21st century, and BI solutions are completely different than what you may be used to. If you follow these tips, you’ll end up with a very short list of vendors, and then it’ll just be a matter of choosing the one you feel most comfortable with in terms of specific features, pricing, support, etc:

Find a Complete Solution, Not Just Pretty Visualization.

The visualization of data is important, of course, but the biggest mistake you can make is judge the BI vendor based on the pretty dashboard samples they show you on their website or during a demo. Every BI vendor can do that because visualization software components are a dime a dozen. The real challenge is customizing these dashboards to your own needs and having them show your own data. This part usually takes most vendors months, and costs you bundles. If the BI vendor cannot get your own data to show the way you like it within just a few days, you could probably find a better one.

Beware of the Data Warehouse.

A data warehouse is a centralized database filled with all the business’s data, and for years it’s been making a ton of money for BI vendors and bringing nothing but grief to customers. Today’s BI technology does not require a data warehouse, even when there are multiple data sources involved, large amounts of data or multiple users querying the data. There are very specific scenarios where a data warehouse is a good idea, but they are most likely not relevant to you. If the vendor requires a data warehouse to proceed with implementation, it is most likely you should keep looking.

Beware of the OLAP Cube.

OLAP, which stands for Online Analytical Processing, is 20 year old technology designed to improve query performance over medium to large datasets. OLAP is also very lengthy and costly to implement, and there is really no need for it anymore. Today’s BI technology can handle even huge amounts of data without OLAP, at fractions of the time or cost. If the BI vendor requires OLAP to assure you acceptable query performance, you should probably move on.

Refuse to Make Significant Upfront Investments.

Many BI vendors will promise you the world, but will demand significant upfront investment in preparation projects, hardware and software before you even get to run a single report on your actual data. Do not agree to this, and demand to have at least one solid report or dashboard running over your own data before you commit to anything significant in advance. If the vendor is not willing to do so, it’s probably because they would have to spend weeks on development before they can reach that point. That typically means this vendor is either using very old technology or is simply trying to pull one over you.

Be wary of Vendors whose Business is Prof. Services.

Vendors who sell real home-grown BI software products (in contrast to OEMing someone else's software) do not like engaging in long professional services projects because it hurts their margins. That is why they prefer to create software that is easy enough to be used directly by the customer or through a third party (which usually lives off these professional services contracts). If you choose a BI vendor who makes most of his business off professional services (as opposed to software sales), you can pretty much be sure that they will take their time building your solution. These types of BI vendors also live off on-going maintenance services, so what you initially pay for the solution is actually only the beginning. Whenever possible, try to choose a BI vendor that focuses on selling BI software to the end customer, not to the professional services community.

Make the Vendor Prove it To You.

The most important thing is to make the vendor prove what they claim prior to investing too much money upfront. This proof must be in the form of reports, dashboards or analytics in real life scenarios, running on real data, used by the actual end users and within a reasonable amount of time. If a vendor is not willing to accommodate this simple request, you really should find one that does. Many vendors provide free trial versions, as well as utilize technology that speeds up implementation tremendously. If the one you're in contact with now doesn't, they shouldn't make your short list.

Read more:  Online PCAP Analyzer.

Business Intelligence Vendors and their Partners – Rough Seas Ahead

The traditional business intelligence ecosystem is built on the numerous strategic partnerships that exist between BI software vendors, which provide the technology, and value added resellers (VARs), which provide customized solutions based on that technology.

The Relationship between BI Software Vendors and their VARs

As in all partnerships, both sides need to have something significant to gain for their partnership to be successful. In the business intelligence industry, this has indeed been the case for a long time. The software vendors use their channel partners to distribute their software to a larger audience and these, in turn, have made a pretty penny from commissions, consulting and implementation fees.

There has always been a distinct difference, however, between the business goals software vendors set for themselves and those sought after by their VARs.

The software vendors, for their part, want to sell as many software licenses as they can to new customers, as well as to charge software maintenance fees from their existing clientele. This provides them a steady income stream from existing customers while new customers grow the business. Their partners, on the other hand, prefer long and complex implementation projects from which they generate significantly more revenue than they do from commissions on software license sales.

This symbiosis used to be great. Since most traditional BI companies are focused on high-end corporations with huge budgets, there was enough to go around. These customers have large numbers of employees who can benefit from BI (read: big money selling software licenses for the software vendors) and who have no problem spending hundreds of thousands (or millions) of dollars on implementation projects (read: significant income from project fees for the implementer).

Mutually Beneficial Relationships?

It so happens, however, that changing conditions over the past couple of years (and particularly during 2010) have brought the traditional business intelligence industry to a point where the mutual vendor-VAR benefits are not as obvious anymore. While these conditions have contributed to a deterioration in relationships between BI software vendors and their partners, the good news is that companies exploring business intelligence options stand to benefit substantially from the situation.

Let’s take a look at some of the conditions affecting the BI industry in recent years:

1. Tough Economic Times

Obviously, the economic crisis which began in 2008 affected everyone, vendors and customers alike. Business intelligence as a concept was actually positively affected by this crisis as it became painfully obvious how important it is to track a business’s operational and financial performance. On the other hand, available budgets shrank significantly and there was a smaller pie to share between BI software vendors and their partners. This fact has been causing friction between the two sides as each attempts to vigorously protect its own piece of the pie.

2. Too Many Partners

In an attempt to gain more market share, software vendors invested extra effort in recruiting more and more VARs for their partner networks. While this had a positive effect on software vendors’ revenues, it wasn’t as good for those in the partner network. Having more partners leads to more competition which, in turn, means more investment in marketing and sales (and lower profits). To make matters worse, in a further attempt to increase revenues, some software vendors actually began competing with their own partners on implementation deals.

3. QlikTech and their IPO

Ever since QlikTech began gaining popularity, their main sales pitch has been shorter implementation times and reduced ongoing costs (due to the supposedly fewer IT personnel required to maintain their BI solution). While this holds mighty appeal to BI customers, it flies in the face of the entire premise of BI resellers, which rely on project implementation and BI maintenance revenues. QlikTech addressed this issue by providing their VARs higher commissions on software license sales (as compared to those offered by Microsoft, Cognos or Business Objects, for example). Coupled with the implementation and maintenance work a QlikTech solution still requires, the higher commissions provide reasonable revenues for their partners.

Along with their impressive sales and growth numbers, QlikTech’s recent IPO revealed that they generated $157M in revenues during 2009 with total expenses of $150M. The resulting profit of $7M is not great.

Whether QlikTech’s intentions are to be acquired soon or to keep growing their business remains a mystery, but either way their partners should pay close attention. If they do seek a quick exit, their partners face an uncertain future. If they intend on growing their business and improving profitability, they will have to raise their prices and/or expand their partner network significantly and/or increase their direct involvement in both software sales and implementation. Existing partners will not be pleased with either of these alternatives.

As the successful pioneer of a newer, faster, easier approach to BI, the QlikTech example should be considered carefully by VARs as an indication of what the future may hold for the BI industry as whole.

4. The Self-Service BI Hype

The hottest thing in the BI industry today is the self-service BI concept. Regardless of whether it’s promoted by vendors providing personal analysis tools or cloud BI platforms, the basic idea behind it is the same: traditional BI is too expensive, takes too long to implement and is a big pain to maintain. Instead, the customer wants tools to enable self-reliance (as opposed to relying on external consultants/implementers who live off service fees). Whether these solutions actually deliver what they promise is beside the point (you can read my opinion about cloud BI here), but the buzz is out there and the market hears it, so it’s getting harder these days to justify long and expensive BI projects.

5. Microsoft PowerPivot

PowerPivot is Microsoft’s attempt to promote the self-service BI concept. By introducing PowerPivot, Microsoft is basically giving up on penetrating the mid-market with SQL Server Analysis Services and is trying instead to do it by introducing stronger BI capabilities in their Office product. While some believe that PowerPivot is just a lot of hot air, the fact remains that Microsoft is investing a lot of effort and money on marketing it. This places their existing partners – who rely on SQL Server sales – in a very problematic situation. These partners prefer SQL Server-based solutions, which provide more license commissions and more project hours, yet they need to fight Microsoft’s own marketing machine which is now essentially promoting self-service BI. Not an enviable situation to be in, to say the least.

What Does the Future Hold?

It’s great that so much emphasis is being placed on simplifying business intelligence and making it accessible to companies that do not have multimillion dollar budgets. Since established players and new startups alike are now beginning to focus on this type of approach, it is actually realistic to expect that self-service BI is on its way to gradually becoming a commodity. Customers will benefit greatly from this trend.

On the other hand, business intelligence VARs must understand that this is where the market is headed – and adjust their business models accordingly. A company selling BI solutions based on existing BI platforms will need to provide real added value to the customer in order to stay in business. In the not-too-distant future, this value will almost certainly come from industry-specific professional knowledge and experience (as opposed to purely technical expertise). More and more customers will no longer accept lengthy R&D projects to achieve BI and, with the new software and technologies now emerging, it is no longer justifiable.

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By: Elad Israeli | The ElastiCube Chronicles - Business Intelligence Blog