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SaaS For The Mid-Market

by Lyndsay Wise, President, WiseAnalyticsMonday, August 30, 2010

When Software as a Service (SaaS) for BI first gained popularity, many advocated benefits for mid-sized companies without the IT infrastructure to support large-scale BI implementations and support.  With actual SaaS adoption, it was found that SMBs were not the only types of organizations to take advantage of what SaaS has to offer.  Departments within enterprises also looked towards SaaS due to the flexibility in deployment and maintenance in order to get quick access to information and to manage that information independent of the businesses’ IT infrastructure and constraints.  Consequently, due to the expansiveness of SaaS use, many organizations see the benefits of deploying SaaS irrespective of the size of their company.

Even so, it stands to reason that many of the intrinsic benefits of SaaS for BI exists for mid-market businesses that until recently, have been unable to adopt BI due to the inflexibility of traditional BI solutions.  Whether price, infrastructure, maintenance or support, traditional BI offerings have lacked accessibility extending beyond the enterprise.  And because many small and mid-sized organizations want the same visibility into their operations and store large datasets, their business requirements are comparable to their enterprise counterparts.

This article discusses some of the benefits and challenges of SaaS BI solutions for mid-market businesses.  In addition, this article looks at how companies are applying SaaS within their organizations and how the market is slowly expanding to accommodate for broader BI requirements.

A closer look at SaaS

The basic foundation of Software as a Service offerings is that it provides the feeling of plug-and-play solutions.  Organizations subscribe to a service, upload data and are granted access to a portal that provides them with the analytics they require.  In many cases, this may be data that is already captured online (such as in the case of Salesforce.com or ADP) and in some cases, data is transferred directly from data sources stored onsite within the company’s firewall.  Either way, the results are the same – SaaS has become the entry point for businesses exploring the potential of applying BI within their companies while limiting the overall risks associated with a large-scale BI implementation.

For mid-sized companies specifically, the impact is great.  Until a few years ago, BI solutions targeted on mid-sized businesses were few and far between.  Now, a plethora of solutions exist, some of which are built primarily using a SaaS framework.  A couple of years ago, organizations were apprehensive about housing sensitive information outside of their firewall and enabling third-party solution providers to manage their access to data.  Now, many companies espouse the benefits of SaaS BI offerings due to their increasing accessibility and growing popularity within the business intelligence industry as a whole.

Some SaaS benefits

Here are some of the key benefits organizations see when adopting SaaS BI:

  1. No onsite development/maintenance required.  As mentioned above, SaaS solutions are provided as a service so that organizations can get the benefits of analytics without having to develop something in-house.  Businesses pay a subscription for access to the analytics and the support associated with using the services and do not have to worry about support, maintenance or solution upgrades as everything is naturally built-in to the model.
  2. Easy to use.  Generally, because of the fact that solutions are offered as a service, interaction with them is easy.  Developing solutions that require little to no training and that can be widely deployed within any business is one of the central goals of any SaaS provider.  In addition, because of the low time to implement and use solutions, if a great learning curve was required, it would lessen the overall value of what SaaS BI has to offer. 
  3. Best-of-breed analytics.  Aside from a select few, most SaaS solution providers offer best-of-breed analytics solutions.  The most widely known example is the large selection of vendors that support Salesforce.com data to help expand visibility into the sales cycle and identify trends based on the collection and storage of information that is not kept within Salesforce.com.  Many SaaS analytical solutions focus on advanced analytics for sales and marketing efforts.  For companies looking at BI for the first time, these are departments that usually see the quickest time to value (specifically sales performance, sales pipelines, etc.) and can provide justification for future expansion.
  4. No large upfront investment required.  Even for larger mid-sized businesses, the costs of traditional BI can be prohibitive.  With a subscription, organizations pay for only what they use and do not have to budget for additional hardware and resources.

Considerations to look at if evaluating SaaS for your organization

As with any solution, benefits give way to challenges.  Here are some considerations to be aware of when evaluating these solutions:

  1. Access is limited to the constraints of the offering.  Best-of-breed offerings mean that the vendor specializes in one or a few specific areas.  When organizations want to expand to other areas, they may have to consider other SaaS solutions or look at implementing a BI solution within their company.
  2. Growth potential (data volumes).  In general, data being captured and used for analytics is expanding exponentially.  Not all SaaS providers can offer customers Terabytes of storage, as available space might be limited.  In addition, some service providers develop their subscription models specifically in relation to how much data they are hosting within their data warehouse(s).
  3. Internal expansion – more people, different types of analysis.  Many SaaS subscription models base themselves on number of people accessing the system, or the amount of data being analyzed.  Add to this best-of-breed analytics and it makes expansion difficult at best.  Depending on the future goals of the organization, certain SaaS solutions may not be beneficial because of their limitations related to expansion.  In terms of cost, this means that subscription fees may increase based on the number of users or additional data volumes.
  4. What about rip and replace?  In some cases, companies outgrow their BI and want to expand to something that provides broader feature and functions.  Depending on the solution choice, access to housed data may be limited and analytics may have to be redeveloped.

Overall sentiments about SaaS for the mid-market

SaaS BI provides a greater level of flexibility in comparison to traditional BI vendors (including implementation times, ease of use, pricing models and support); however, SaaS also has its limitations.  Organizations should evaluate the benefits and challenges to identify whether SaaS provides the right fit for their business intelligence and analytics platform.

About the Author

Lyndsay Wise is an industry analyst for business intelligence. For over seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay is the channel expert for BI for the Mid-Market at B-eye-Network and conducts research of leading technologies, products and vendors in business intelligence, marketing performance management, master data management, and unstructured data. She can be reached at lwise@wiseanalytics.com. And please visit Lyndsay's blog at myblog.wiseanalytics.com.


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