The mantra "Friends don't let friends buy servers" is leading new technology purchases at Schroder Investment Management North America Inc., where the goal is to minimize additional infrastructure where possible.
With its customer data already in the cloud on Salesforce.com, adopting the Software as a Service (SaaS) format for business intelligence (BI)
"It was an easy decision," he said. "The price is low. The ongoing cost is low. You don't have hardware infrastructure costs. You have a lot less risk. On-demand reduces the need for change control."
Many analysts say SaaS BI will gain greater adoption in this recession, and some see promise in the SAP Business Objects on-demand product line.
It's the first end-to-end BI line in which the entire suite of components, including everything from data acquisition through integration, is offered in a pure multi-tenant environment, according to David Hatch, vice president and principal analyst of Boston-based Aberdeen Group. The products can accomplish the three major tasks of business intelligence: data collection, putting business rules to that data, and delivering it in the form of reports, charts and dashboards.
"What excites me is the potential this offers to companies [that] don't have the IT resources to implement [BI] internally," Hatch said. "They now have the opportunity to gain access to that full range of Business Objects solutions."
But others question whether BI on-demand will see significant adoption until more companies deploy their primary enterprise applications in the cloud.
"In the typical organization, the typical enterprise, my data is all over the place. It's in SAP financials and Oracle CRM," said Boris Evelson, principal analyst with Cambridge, Mass.-based Forrester Research. "I still need to find the data, integrate it, cleanse it, model it, and as the last step, I can take my clean data and give it to my BI SaaS vendor to store in their data warehouse."
Business Objects said its new version of BI OnDemand -- the company's BI platform, which includes a data warehouse and reporting products such as Crystal Reports -- includes new content creation and development capabilities which ensure that data from both on-demand and on-premise applications is available to the business user.
The company has also improved the data warehouse on-demand offering, according to Carl Dubler, who is SAP Business Objects' senior product manager, on-demand business.
"It's one thing to get a data warehouse deployed in the cloud," Dubler said. "It's another thing to keep it refreshed and relevant. We can handle the complete lifecycle of a data warehouse in the cloud."
Schroder's chose on-demand products from SAP Business Objects because it had experience with some of the tools, such as Crystal Reports, and wanted to deal with a global, high-quality firm, Leinweber said. They're currently using crystalreports.com and the BI OnDemand accelerator for Salesforce.com.
"We cannot support more heavy infrastructure with the same staff," he said. "You can't add mission-critical apps with people who are already too busy. [Schroder's has] Salesforce.com, and most of [the division's] data is in the cloud anyway, so putting BI on-premise didn't make much sense."
Many companies are looking at SaaS BI because on-premise BI projects are so expensive. It's tough to do a project for under $1 million that includes data integration and data warehousing, Evelson said.
"BI has traditionally been a very difficult application to install and configure and optimize," he said. "It's a very expensive proposition between the software and the hardware and all the consulting services."
On the other hand, for typical, midmarket customers with 75 users and 100 GB of storage, BI OnDemand costs about $107 per user per month, according to SAP. For a typical large company, with 1,500 users and 500 GB of storage, it costs $47 per user per month.
Still, Evelson argues that if 80% of the effort and processing has to be done in-house, there need to be strong business drivers for handing over the last 20% of the project to a vendor.
That said, he thinks BI on-demand will continue to be popular in niche cases, such as with Salesforce.com users or with human resource analytics that are already outsourced, like payroll. The Aberdeen Group's Hatch said that SaaS BI deployments tend to be most common in the sales and marketing areas of a company.
"For the foreseeable future," Evelson said, "I see SaaS BI as specific use cases."