Cloud Computing and Open Source BI Trends Affecting the Mid-Market - Part 1

Originally published March 13, 2012

In recent years, the business intelligence (BI) market has shifted from one that has only served larger enterprises toward an industry ripe with multiple types of offerings to address a variety of organizational business pains. For smaller and mid-sized organizations, this means that what was once out of reach is now a viable option. Storage is less expensive, processing times are quicker, and licensing and support is no longer a stumbling block to adoption due to the increase in subscription-based models. Add this to hosted offerings and solutions that are developed targeting small and medium-sized businesses (SMBs), and organizations now have something to work with.

For the past few years, more and more SMBs have been looking toward business intelligence and data warehousing solutions to consolidate disparate data sources, enhance their business visibility and conduct more in-depth and standardized analytics. Many current market trends actually work to the benefit of these companies by providing lower cost solutions that are quicker to implement. When looking at trends a few years ago, most of what the mid-market had to go on were lower price points and enterprise architected offerings with watered down features and functions. This is no longer the case. Solutions are more mature and many smaller vendors have developed BI offerings that speak specifically to smaller enterprises.

This series of articles focuses on some of these market trends and the implications of adoption for the small and medium business (SMB) market. Part 1 looks at cloud computing and open source, while Part 2 will look at how mobile access enhances ease of use, the maturity of data management and the focus on social access. This includes looking at social network analytics, social media analysis and collaborative/social business intelligence. Together, these articles will provide the basis for understanding why SMBs are now able to take advantage of business intelligence and analytics without the roadblocks that once existed.

Cloud Computing and Wider Accessibility to Data

Data in the cloud is a key trend within the BI market. For the past few years, organizations and vendors have started turning toward externally hosted solutions with the promise of easy implementation, access, and interaction with solutions. In essence, software as a service (SaaS) BI offerings were being touted as the way to access self-service analytics and dashboards. As cloud computing started to take hold, the concept of data as a service (DaaS) became more relevant to the market with vendors starting to offer ways of hosting large organizational data sets. With security, privacy, and governance continually requiring measures to control data access, the ability to house information outside the firewall but still maintain the strong levels of control desired provided many organizations with a way to take advantage of the DaaS infrastructure while controlling information access. When looking at organizations with a large number of developer projects, not having to set aside internal servers provides an added bonus.

As an extension of hosted applications, more and more organizations have begun turning to outside providers for data storage, analytics, and the like to provide quicker access to information and analytics. The use of cloud computing offerings is quite similar, especially for many SMBs. The ability to pay a subscription fee to house data externally creates a data warehousing infrastructure that remains a fixed cost within the organization. In addition, many solution providers are adding the option of cloud to access their offerings, making access to mature market offerings much more realistic. Although in the long term accessing data in the cloud might actually be more costly for SMBs, the ability to budget for business intelligence and understand the limitations up front provides a feeling of security in relation to BI adoption and use.

However, with any benefits come challenges. One of the big ones SMBs should be aware of are any limitations that exist within the cloud. Obviously, technological advancements mean broader delivery, more storage, quicker processing speeds, and the like. What it also means is that many vendors put constraints around data volumes stored, number of users, types of uses, etc. All of these limitations may affect fixed costs associated with business intelligence and growth over time, making cloud offerings a potential benefit but also challenging mid-market expansion over time. What hosted and cloud-based business intelligence has done on a broader level is provide many SMBs access to BI products that they would otherwise not be able to consider.

Open Source Accessibility

The open source business intelligence market has continued to expand and become a fairly mainstream option for many organizations. In smaller businesses with limited budgets, many developers are already familiar with open source environments. In these cases, expanding general open source adoption to business intelligence specifically may seem like the obvious choice. Many developers are more than willing to deploy and customize solutions to fit their organization’s business needs through analytics. In addition, with the commercialization of open source business intelligence, the reality is that there are not many differences from traditional BI sources. Because many SMBs look at open source first, the ability to provide valuable solutions for this market has always been a benefit of open source community feedback and quick product release cycles.

However, the challenges to open source are also broad. The continued shift toward commercial offerings makes it harder and harder to differentiate certain open source BI offerings from traditional BI counterparts. This can make it more difficult to sell the value proposition of free access to software and community with so many solutions now providing free trial versions and access to personal BI offerings. Some business decision makers within SMBs are starting to find open source more appealing because of the push toward commercialization, while others fail to understand differentiations that exist due to a crowded marketplace. In either case, free source code is no longer enough to draw open source BI adoption as organizations look for the key differentiators of each solution on their desired short list.

Linking Cloud Computing and Open Source BI to SMB Adoption

Both cloud and open source availability help SMBs get access to business intelligence. For organizations not wanting to invest heavily in new hardware and software the promise of cloud computing is great. No upfront additional investments outside a yearly subscription fee are necessary to provide BI access. Open source does enable businesses to get up and running more quickly as many solutions can be downloaded and accessed fairly easily. Optimization, ease of use, and maintenance may be other issues, but there are no roadblocks to direct access. Both of these BI trends provide broader access to business intelligence in general, and specifically to SMBs. With more options and more diversity, businesses can utilize the technologies they require without having to compromise based on vendor offering limitations. Overall, each has enabled broader adoption in its own way, and also helped broaden what SMBs see as potential deployment methods and access points for their BI and analytics environments.


  • Lyndsay WiseLyndsay Wise

    Lyndsay is the President and Founder of WiseAnalytics, an independent analyst firm specializing in business intelligence, master data management and unstructured data. For more than seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay conducts regular research studies, consults, writes articles and speaks about improving the value of business intelligence within organizations. She can be reached at lwise@wiseanalytics.com.

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

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