• Votes for this article 2 people voted for this
  • Dashboard Insight Newsletter Sign Up

How SaaS Has Changed The BI Landscape

by Lyndsay Wise, President, WiseAnalyticsMonday, August 16, 2010

Until recently, traditional business intelligence applications led the way for companies  looking to apply analytics within their organizations. Businesses looking for alternatives to large data warehousing and BI infrastructures were hard pressed to find alternatives outside of open source offerings.  As enterprise organizations became more mature in their BI use, solution providers started to expand their offerings towards a broader audience.  One of the outcomes is the proliferation of Software as a Service (SaaS) for BI and analytics, which has led to a slow and steady change in the way BI is offered and has changed expectations of organizations in relation to business intelligence due to increased flexibility and ease of delivery.

Although SaaS solutions have existed in the form of payroll, ERP, sales, etc., the overall adoption of SaaS for BI is a newer expansion in relation to the concept of providing analytics as a service.  Consequently, many solutions now exist and offer analytics specific to Salesforce.com, data warehousing, general sales analytics and the like.  In addition, broader BI providers are now selling similar solutions that enable customers to choose the type of delivery based on usage and access preferences.

Overall, SaaS is changing the way organizations look at business intelligence solutions.   Expectations related to service levels, ease of use, and pricing guide purchasing decisions independent of company size or breadth of use.  On a broader level, software vendors are responding to this change by expanding solution offerings, developing self-service models, placing a higher priority on value-added services, expanding licensing and pricing options, and delivering solutions that are services based. This article references these market changes and looks at how SaaS BI has enabled general BI market changes.  These include overall pricing and licensing, the push towards self-service BI, providing a service-oriented approach to solution provision and the expansion of BI beyond the enterprise.  Also, this article discusses the increasing use of targeted analytics and the diversity of BI use within organizations.

Pricing models

Traditionally, business intelligence demanded additional costs to deploy and maintain in-house solutions on top of software and implementation requirements.  Licensing and support presents a large portion of overall long-term costs and maintenance considerations that made exorbitant BI pricing even more out of reach for many organizations.  The entry of SaaS changed licensing structures and increased overall control of businesses over their BI use.  Organizations could look at BI access as a set of subscription fees paid monthly or yearly and broken down by usage, data access, etc. This in turn created an atmosphere where other companies using BI began to demand licensing options and no longer wanted to pay large sums of money to support a limited number of seats.  In addition, with increasing competitive factors and the broadening of available offerings, the expansion of licensing models was not only practical, but also provided an edge in relation to solution providers that enable businesses to choose the model that best fits their environment, leading to offerings more in tune with customer needs.

BI as a service and self-serve

Another transition away from traditional BI towards a more customer-centric approach is the way in which SaaS provides a transition of the way BI is viewed both by organizations and by solution providers.  Because technological advancements make it virtually impossible for one vendor to win out over another in terms of features and functionality, vendors now look for additional ways to add value to their offerings. Whether this means providing value-added services, lower price points or free trials, many solution providers also look at the service model as a way to give customers greater benefits.  Even for vendors that do not offer SaaS as a choice, the general way solutions are offered has shifted to support a services model.

This means that offerings are being driven by the push towards self-service models and by providing solutions that give consumers the freedom to customize their overall interactions within their BI environments.  Although many SaaS BI solutions provide a subset of overall BI functionality and are accessed through ready-made portals using standard user interfaces, the general consensus is that the solution offered is tailored towards individual, department or company needs.  More general BI offerings are also starting to move in this direction by providing customization capabilities at the business level and not only within developer modules.

Departmental, mid-market, and non-enterprise usage

One of the key benefits of SaaS BI is the ability for any organization to take advantage of what business intelligence has to offer.  By removing barriers to entry that include developing a strong data warehousing infrastructure and requiring developers to build solutions and IT to maintain applications, companies can now gain the benefits of BI without the added roadblocks.  Consequently, BI has opened itself up to small and mid-sized businesses that would otherwise not have the opportunity to adopt BI due to the infrastructure and maintenance requirements.  SaaS BI has made it possible for mid-sized organizations or individual departments to utilize analytics to answer specific business questions.  And although long-term subscription costs may not be lower than traditional BI implementations, the ability to get the benefits of BI without a large upfront expense, offers the benefit of seemingly lower-cost BI.  And this form of BI can be more easily justified within departments or smaller companies when looking at IT expenditures.

Niche analytics

In most cases, SaaS BI solutions target specific analytics to give end users the ability to make better decisions based on a subset of business-oriented data.  A common example is Salesforce.com with others being sales pipeline identification or sales analytics.  This enables businesses to get best-of-breed analytics to help solve business problems.  Unfortunately, this also shows that SaaS BI does not always offer full BI offerings.  The general benefit of targeted analytics also serves as a downfall when looking at expanding usage over time to accommodate broader BI requirements as an organization’s use of BI grows over time.  Although targeted analytics can give decision makers the tools to get answers to specific business problems faster, it also limits the ability to apply these analytics to other areas within the organization.  On the other hand, easy access might offset some of the challenges associated with limited analytics.

BI diversity

Overall, the key benefit of adding SaaS to the BI landscape is the broadening of offerings and types of solutions available.  SaaS has been one of the changes within BI that enables both organizations and solution providers to expand what exists as part of BI.  Within the past few years, the BI landscape has changed significantly with SaaS being a key enabler.  Aside from subscription-based licensing and moving away from individual seat licenses, vendors are starting to realize that providing value-added services and giving end users control over design and delivery is more important than adding additional features and functions that only serve a niche customer base.


SaaS BI is one of the general market trends that has helped broaden business intelligence solution availability and overall flexibility.  The use of traditional BI meant conforming to an infrastructure proscribed by solution providers.  The expansion of SaaS (along with other industry expansions) puts BI control into the hands of organizations, departments and individual decision makers thereby changing overall BI use and expectations.

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.

(Copyright 2010 - Dashboard Insight - All rights reserved.)

Tweet article    Stumble article    Digg article    Buzz article    Delicious bookmark      Dashboard Insight RSS Feed
Other articles by this author


Dyke Hensen said:

Great article Lyndsay. We’re seeing these trends play out as more enterprises shift to this new BI approach and benefit from innovations driven by SaaS players, such as intuitive user interfaces, simple data integration value add data mash-ups. Today there are a bevy of BI tools that address a narrow business problem and support just one or two data sources, but organizations don’t have to compromise just because they want to measure one key aspect of their business. Mature SaaS BI solutions combine analytic applications with an enterprise-scale SaaS BI platform and a community of partners with deep domain expertise. The low risk SaaS BI approach promotes viral BI adoption in organizations like REI, a customer that has expanded its on-demand analytics across merchandising, finance, stores and supply chain partners. We expect the viral aspect to accelerate with “quick start” SaaS BI applications in areas like sales, marketing, HR and retail that bundle specific KPIs, metrics and dashboards.
Niche? Perhaps, but these SaaS-based BI solutions don’t imply small data volumes or user communities; highly elastic cloud computing platforms encourage quite the opposite with no upfront costs and disruptive pricing modesls.
- Dyke Hensen, SVP Product Strategy, Pivotlink

Barbara Lewis said:

SaaS BI is indeed changing the BI landscape - not only making BI easier to use, but also by simply making the market larger. Companies and departments that needed BI but could not afford it are finally getting access to much needed insight.

Another aspect of pricing that SaaS BI vendors can do easily but on-premise software can't is concurrent user pricing. If a company has 10k potential users but only 1k on the system at any one time, a customer can simply pay for the 1k active seats. Now, BI is finally available throughout an organization, to front line employees who have direct contact with customers and can make tremendous impact.

- Barbara Lewis, Birst

Andy Ellicott said:

Excellent article Lyndsay.

I've been in and out of BI and data warehousing for years (as a vendor and a practitioner). I also lived through the market transition from custom-developed enterprise applications to the rise of turn-key enterprise apps (from SAP, Peoplesoft, JDE, Oracle, et al). Companies started realizing they can't custom develop ALL applications themselves and that some apps had become fairly commoditized (ERP, CRM, et al). So they started making better buy vs. build investments. Plus, SAP, et al were providing them with better buy alternatives.

Lyndsay, a question for you. Do you think that the same transition could occur within BI? I think the tendency is for people to lean towards custom development. But the turn-key BI app alternatives have come a long way--especially due to SaaS. Do you think turn-key BI applications will eventually gain a larger foothold in companies' BI application portfolios?

SaaS BI Application vendor, Oco, described the transition in their blog. Search it for the "Is mass adoption of turn-key BI apps close at hand?" article.

Thanks Lyndsay,
Andy Ellicott, VoltDB

Site Map | Contribute | Privacy Policy | Contact Us | Dashboard Insight © 2018