On-Demand Business Intelligence

by mike on December 23, 2007

One of the most exciting developments within Business Intelligence (BI) software is the emergence of Software-as-a-Service (SaaS) or On-Demand solutions. More and more vendors are offering their software via an on-demand model. SaaS has touched virtually every category of BI, including but not limited to analytics, dashboards, data mining and data warehousing. Customers want shorter deployment times, lower implementation fees and flexible solutions. They are sick of broken promises and expensive software installations with unattainable ROIs. At the same time, vendors gain predictable cash flows, greater visibility into how customers are using the software and one platform to support. Of course, SaaS doesn’t come without its challenges. Overwhelmingly the biggest concerns are around data, namely security, integration and quality.

According to Gartner, the BI platform market will continue to grow at a solid pace during the next five years, with software revenue experiencing a compound annual growth rate of 9.5% through 2010. Gartner also estimates the worldwide total software revenue for SaaS within the enterprise software markets to surpass $5.1 billion in 2007 with strong growth through 2011 to $11.5 billion.

There has been a flurry of activity in the BI space over the last few months, including further consolidation and investment. We’ve seen two big-time acquisitions. In October, SAP announced they will acquire Business Objects for approximately $6.8 billion. Not to be outdone, IBM announced in November that they plan on acquiring Cognos for $5 billion. Investors are also starting to take notice of SaaS players. LucidEra raised $15 million, Oco $10 million, Seatab $9 million and the list goes on and on.

In 2008, we will continue to see the adoption of SaaS BI solutions in both the Enterprise and SMB markets. The SMB market is a natural target for SaaS solution providers due to their inherent cost and resource constraints. Vertical-focused solutions will also continue to thrive as domain-specific intelligence remains a key customer requirement.

I’ve highlighted a short list of vendors offering SaaS solutions.

LucidEra, Oco, Seatab Software, Dimensional Insight, OnDemandIQ, SharpAnalytics, Host Analytics, Qliktech , Visual Mining

If you are a customer using a SaaS BI solution or a SaaS BI provider, I’d love to hear about your experience thus far. Feel free to contact me.

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