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Richard Hackathorn

Welcome to my blog stream. I am focusing on the business value of low latency data, real-time business intelligence (BI), data warehouse (DW) appliances, use of virtual world technology, ethics of business intelligence and globalization of business intelligence. However, my blog entries may range widely depending on current industry events and personal life changes. So, readers beware!

Please comment on my blogs and share your opinions with the BI/DW community.

About the author >

Dr. Richard Hackathorn is founder and president of Bolder Technology, Inc. He has more than thirty years of experience in the information technology industry as a well-known industry analyst, technology innovator and international educator. He has pioneered many innovations in database management, decision support, client-server computing, database connectivity, associative link analysis, data warehousing, and web farming. Focus areas are: business value of timely data, real-time business intelligence (BI), data warehouse appliances, ethics of business intelligence and globalization of BI.

Richard has published numerous articles in trade and academic publications, presented regularly at leading industry conferences and conducted professional seminars in eighteen countries. He writes regularly for the BeyeNETWORK.com and has a channel for his blog, articles and research studies. He is a member of the IBM Gold Consultants since its inception, the Boulder BI Brain Trust and the Independent Analyst Platform.

Dr. Hackathorn has written three professional texts, entitled Enterprise Database Connectivity, Using the Data Warehouse (with William H. Inmon), and Web Farming for the Data Warehouse.

Editor's Note: More articles and resources are available in Richard's BeyeNETWORK Expert Channel. Be sure to visit today!

May 2008 Archives

At a recent Boulder BI Brain Trust session, Ken Rudin, CEO and co-founder of LucidEra, discussed his company's products as supplying BI services in the style of Software-as-a-Service (SaaS). An overview of our discussions was published elsewhere.

SaaS intrigues me. More and more, my personal computing environment revolves around Google apps, Flickr, NewsGator, del.icio.us, and the like. However, SaaS is a tricky market segment invading a traditional IT community that resists such disruptive approaches. Further, layering BI services upon SaaS becomes a very thought-provoking topic.

Let's consider the BI-as-a-Service approach, which is... I will supply you BI services for a subscription fee. You give me your data. I will host it in my datacenter and generate reports for you on demand.

To experienced BI/DW professionals, this approach feels like... Give me your laptop. I will take care of it and distribute information to you upon request. The reaction is likely to be very negative.

Rudin has a contrasting analogy that parodies the traditional BI approach, which takes several complex products (database, ETL, query/report generator) and over the coming year builds an in-house BI system. To a small company, this feels like... Here are your BI services. By the way, you have to maintain this nuclear reactor to power those services. The reaction is also likely to be negative.

There is no doubt that BI-as-a-Service has become fashionable for smaller companies who have little IT infrastructure and certainly no depth of IT expertise. To them, BI-as-a-Service makes good business sense (low cost, quick time to value), once the obvious concerns (data security, ease of use, service reliability) are mitigated.

So, I wonder... Are SaaS and BI-as-a-Service just niche markets restricted to smaller companies (and isolated corporate departments) who will never grow into the need for cross-functional enterprise systems? Yet, there are large corporations with mature IT who are extensively using SaaS. Are these corporations naive and short-sighted?

I have experienced similar issues in the context of data marts. Data marts are attractive to business users who want to control their IT for their limited set of requirements. This can result in a quick solution with lower cost, but it usually leads to the fragmentation of enterprise data and weaknesses in cross-functional analytics. However over the years, we have learned to architect data marts as a consolidated and managed elements within enterprise systems. What is the lesson learned here?

So, I wonder... Are SaaS and BI-as-a-Service just stop-gapped solutions that will eventually be incorporated in the enterprise system, once corporate IT catches up on their development backlog? Rudin smartly refers to this reasoning as his Trojan horse strategy for corporate sales. Get LucidEra solutions inside as a short-term fix, and these solutions will become permanent elements (because corporate IT will never get their act together).

I believe that there is a deeper story here. In the normal sense, SaaS is not software, and BI-as-a-Service is not Business Intelligence. We have mislabeled this market category. They are really the packaging and delivery of best business practices, which was a major point of a previous blog. They should not be view as competitive to or disruptive of enterprise systems. The challenge (and where I believe all this is heading) is to find the synergism between enterprise IT and SaaS.

SaaS in general and BI-as-a-Service in particular must be transformed into 'performance-focused analytics' which is part of Business Performance Management. The objective should be to continuously innovate on best business practices for specific business processes. That is not competitive or disruptive to corporate IT. In fact, it can be an essential value proposition for corporate IT.

On the other hand, corporate IT must be concerned about the enterprise architecture, with its standards for reliability, security, integration and consistency. In other words, SaaS should play as a well-behaved component in a well-planned Service-Oriented Architecture (SOA). None of this 'grab the data and run' mentality! SaaS should depend on many lower SOA layers and support various higher SOA layers. The visible reports of SaaS should be internalized as rich data objects and materialized as pixels on the screen only through several other SOA layers. This is mashup galore enterprise-style with reliable and secure web services into the SaaS datacenters.

What is your opinion on the proper integration of SaaS into the enterprise architecture? Please comment.

Posted May 14, 2008 1:05 PM
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