11:46 AM

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.

"Cloud" is on my mind, and not just because I'm cleaning up in the aftermath of Hurricane Irene along with everybody else in the Northeast.

Vendors big and small are trying to make "cloud" a household word. For the most part, such hype seems to be falling flat. Microsoft's commercials declaring "to the cloud" are generally met with puzzled looks by anyone outside of IT. (As if moving to the cloud were the end game!)

A survey by The Data Warehousing Institute last year found that only 9% of BI professionals were "very familiar" with cloud-based BI. (Share your thoughts on cloud BI in this survey.) If so few professionals understand the promises and pitfalls of cloud BI, we have a long way to go before it becomes a commonly considered deployment option.

Cloud BI is exciting for its promise of faster deployment, lower entry costs, and far more elastic scalability than conventional BI deployments. To date, cloud BI efforts have blended purpose-built software with cloud infrastructure. Services like PivotLink, Birst, and Indicee all have their own application layers. Customers buy these solutions for both the front-end capabilities and for their software-as-a-service (SaaS) approach.

SAP BusinessObjects BI onDemand is a little bit different in that it supports sharing of documents created in Xcelsius and Crystal Reports, but it's not as robust as the on-premises SAP BusinessObjects suite. MicroStrategy Cloud, the latest cloud-based BI offering, promises to be as easy to get up and running as current SaaS offerings but with all the robustness of the vendor's on-premises software.

One of the biggest pain points for companies embracing BI is the initial deployment. For the most part, BI software is painful to install and configure. Configuring BI for thousands of users, often extending across extranet deployments, requires special skills that are not required on an ongoing basis.

Expertise in designing data models and authoring reports and dashboards, on the other hand, is something you should invest in as these skills will be needed on an ongoing basis. With a cloud BI environment, the vendor provides the infrastructure and the software. Customers pay to use the service on a monthly or yearly basis. Leaving the deployment work to the vendor and the ongoing BI work to your team seems like an intelligent division of duties; but concerns about security, loss of control, and general lack of knowledge abound.

MicroStrategy has taken a different approach than many BI SaaS offerings on a number of points. First, it's using its own data centers, whereas SaaS startups tend to rely on the Amazon Cloud. MicroStrategy says for now it will own the infrastructure to be able to control performance. The data centers are powered by Cisco, NetApp, and Dell hardware, and the vendor says it will invested $100 million in infrastructure over the next three years.

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?

What is your level of interest in cloud BI? Take this 10-minute survey and you'll get a copy of the survey highlights, plus a chance to win an Apple iPad.

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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