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Is Cloud Business Intelligence Really Your Best Choice?

Cloud is the “new normal”, and the use of business intelligence is increasing in organizations of all sizes. But does that mean you’ll be using cloud BI for your own enterprise?

Although the advantages of cloud computing have been praised by the press and various vendors, it’s important to resist the temptation to dive in without a second thought.

There may be good reasons to consider a cloud-based business intelligence solution, but there may also be elements that mean an on-premise solution is preferable for your organization. You should first look  at what you need, and decide afterwards on the best approach to meeting those needs.

We’ve taken a look at four key areas that could sway your decision one way or the other, and described them below. After reading, you should have a much better idea of whether cloud or on-premise business intelligence makes more sense for you.

IT System Cost

Money, money, money. Running business intelligence in the cloud is often seen as the best way to cut costs. The rationale is that, by using somebody else’s infrastructure on a pay-as-you-go basis, you avoid your own capital expenditure and you only pay for what you use.

Indeed, when you consider some of the complex or resource-intensive BI configurations in use today, the possibility of shifting the financial outlay needed for high-priced, high-octane systems onto somebody else sounds attractive. However, there are two aspects that could mean saving less than you might expect.

First, cloud service providers need to make money, too. Even if they offer small or zero initial costs, monthly subscriptions or per usage charges will be calculated according to the amount of infrastructure required and the risk to the provider. If your BI vendor insists on massive data warehousing storage or huge processor ratings for handling queries and analytics, this will be reflected in your bill.

Second, some powerful BI solutions also work well on inexpensive, commodity hardware – the sort you might have on your site. Smart use of in-chip memory and columnar database formats allows a BI application to access only the data needed for a given query, instead of having to ingest huge datasets. Similarly, fast data store architecture that is especially made for extensive querying removes  the need for cumbersome data warehousing, while still giving users easy access to all the data sources of their enterprise.

Technology innovations like these narrow the cost difference between cloud and on-premise BI solutions. As you make your decision, look at the real costs for each option, rather than relying on hearsay or advertising hype.

Data Center Overhead

Data center overhead for BI solutions is often understood to be simply the load on the IT department for setting up and supporting the BI system. But this is a mistake. It’s true that any system will require some time and effort to install and maintain it. However, support for users and their demands for integrating new sources of data, setting up new queries, and creating new reports may consume far more resources.

Whether a BI solution runs in the cloud or on your premises, the big difference in overhead will be in the possibilities of self-service for the non-technical people in your organization. When your business end-users can ask ad hoc questions, get their insights by themselves, and make their own graphics and dashboards to discuss the results, that frees up your IT staff to work on other projects of value to your enterprise.

Even if cloud BI platforms include vendor services for deployment, maintenance, bug fixes, and upgrades, you should still do your homework. Look at the savings available from intuitive and effective BI self-service, before factoring in the technical impact of hosting the BI solution on your server or on somebody else’s.

Information Integrity and Confidentiality

Scaremongering and fear of letting data go outside the company walls have sometimes given cloud BI security a less than perfect reputation. Yet in many cases, data held in the cloud is safer than if the same data were held on site. Cloud providers invest in both physical and cyber security to protect all the resources they manage, with strong encryption, robust permission systems, and continually replicated data stores. Their ability to keep current customers and attract new ones depends on their trustworthiness as service providers.

What cloud installations may not offer, however, is the same level of control that you have on your own premises. For example, cloud providers may feel greater pressure to release customer data to law enforcement agencies, if asked to do so. If your organization works with very sensitive data, such as personal health information or consumer financial records, you may feel that an on-premises solution is the only way to ensure the stringent control you require. Regulatory restrictions may also prevent you from using a cloud-based BI solution in the US, for example, if your data must not leave the European Union.

Working with Internal and External Partners

Collaboration between businesses is increasingly popular as a way to compete in markets. Sharing data, analytics, and insights allows enterprises to move ahead together with joint projects and ventures. However, many companies are rightfully wary of exposing their internal systems to external users, even when these users are their own employees working from other locations.

Cloud BI platforms offer possibilities of collaboration that do not compromise on-premise IT security. In addition, by centralizing data and analytics in one virtual location, you can create one version of the truth across your entire enterprise and with your business partners. Well-designed cloud BI solutions will allow authorized users to access business intelligence resources from any device, anywhere and at any time. Dashboards can be available for self-service, encouraging innovative use of business data and BI queries by non-technical users, whether from your own company or that of your business partner.

What will You Choose for Your BI Hosting?

Your decision must be driven by the capability of a cloud or an on-premise BI solution to best meet your business needs. Besides efficiency and cost-effectiveness, you will also want a BI system that can easily:

  • Handle your different data sources
  • Offload your IT department
  • Put BI power into the hands of your business users
  • Deliver results – fast (approaching real time for everyday BI queries)

Draw up your list of requirements, using the information above and any other needs you have. Then rank any solutions you’re thinking of according to how well they meet each requirement. Some solutions offer fully functional versions for either cloud based use or on-premise deployment, which may simplify your decision process. In this case, you’ll know that your BI platform will offer you the performance and flexibility you need wherever you host it, leaving you free to make the final choice that suits your business and your budget best, without sacrificing any of the advantages.

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