Will BI Deployment Pain Be MicroStrategy's Cloud Gain?

Business intelligence software-as-a-service option lets you focus on developing dashboards and reports rather than installing hardware and configuring servers.
MicroStrategy has long been known for its enterprise capabilities and data scalability, so I can understand why it wants to keep a tight rein on the cloud offering. However, I question if managing data centers moves too far beyond the company's core competency.

MicroStrategy also is blending its cloud approach, letting customers either keep their data on-premises (and use the cloud only for the MicroStrategy application layer) or load it into the cloud. This addresses one of the biggest fears about cloud computing: who controls the data. Few other SaaS BI vendors allow such a hybrid approach -- although Birst was one of the first to introduce it back in 2009.

To support implementations in which the data also resides in the cloud, MicroStrategy has partnered with IBM Netezza for its data warehousing appliance, ParAccel for its columnar database, and Informatica for ETL capabilities. I would imagine small- to midsize-businesses as well as departments that lack their own IT resources would find this latter approach appealing.

In an era in which SaaS vendors tout their multi-tenant architectures, I am concerned that MicroStrategy's service is not multitenant. In the post-mortems on defunct SaaS vendor Lucid Era, its single-tenant architecture (and resulting high maintenance cost) was cited as one of the reasons for the company's failure.

Architects can get religious in their arguments for and against. The "for" multitenant arguments: multiple clients run on a single deployment, and the shared infrastructure makes it easier and cheaper for the vendor to maintain the environment. The "against" arguments: customers want to customize their environment and fear sharing anything. MicroStrategy Cloud will rely on virtualization, with multiple companies running on the same hardware, but each operating in its own virtual environment.

When considering any SaaS solution, the question for customers continues to be, what's the cost/benefit? Is SaaS more expensive over time than an on-premises solution? MicroStrategy presents a cost/benefit analysis for 200 users over five years that projects more than $1 million in savings for those using its cloud approach. The service was released only last month, so it's too early to tell what the real-world case studies will show.

I'll be curious to see how many customers and which customers take to MicroStrategy's cloud. Will it be small- and midsize-businesses that lack IT resources; or will it be in departments within enterprises that are looking for fast deployment?

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Cindi Howson is the founder of BI Scorecard, an independent analyst firm that advises companies on BI tool strategies and offers in-depth business intelligence product reviews.

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