The collection and use of data is transforming many industries - many relying on the cloud’s efficiency

Cloud Hosting Opens Possibilities for Business Intelligence

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Businesses create an abundance of data with each interaction, transaction and impression, which is dutifully collected and stored in massive databases. But it’s really in grounding the data in context and correctly interpreting it that the data becomes useful knowledge to truly help businesses run more efficiently and make better decisions.

To bring intelligence to data, the field of Business Intelligence emerged to essentially turn data into information with the aid of computing. Until recently, with the emergence of wide-scale cloud computing, BI was seldom used by organizations other than those that could afford dedicated BI and analytics staff. Today, however, we’re seeing companies of all sizes unlocking the value of their data thanks to emerging cloud delivery models.

“Cloud is a big part of future Business Intelligence and offers several advantages in terms of cost benefits, flexibility of implementation, availability and speed of implementation,” wrote Lekha Menon and Bhawna Rehani in a recent white paper from Tata Consultancy Services (PDF).

However, many things stand in the way of wider cloud BI adoption including data security concerns related to cloud hosting, orchestrating a sudden movement of data to the cloud, a crowded vendor marketplace that makes choice difficult, data warehouse size and performance limitations, and a lack of standard pricing models.

While drawbacks – both actual and imagined – remain, cloud BI is becoming regarded as a an important part for organizations ranging from large to small, according to statistics from Dresner Advisory Services.

Intelligence Available to (Nearly) All

Brad Peters, CEO and co-founder of BI Software as a Service provider Birst, says cloud computing has opened up BI to small and medium-sized businesses that would otherwise never have had the necessary resources.

“I think there are a number of economic drivers that let smaller companies get into the game,” Peters says. “The economics of analytics have dropped to the point where it’s not much more affordable by mid-sized organizations or smaller organizations and I think a lot of that has to do with cloud.”

BI used to have around 5 to 10 dedicated analytics and data warehousing staff, along with the infrastructure to store and process vast amounts of information.

“When you can outsource much of that staff to the cloud, you all of a sudden don’t need 5 to 10 people, you need one,” Peters says. “And that enables a lot of organizations to take this on.”

Greater Speed and Efficiency for Larger Organizations

Meanwhile, Dresner Advisory Services president and founder Howard Dresner, notes that cloud BI also offers advantages for large corporations. “Larger organizations will move to cloud BI departmentally because they won’t or can’t wait for IT to serve their needs.” This is precipitated by the fact that the cloud gives their smaller competitors near-term competitive advantages.

Peters says organizations also see value in BI solutions at all stages of the economic cycle – whether bull or bear. When things are going well, BI is used to outsmart competitors. And in an economic downturn, BI is seen as a way to increase productivity amid staff and budget cuts.

“The only way to get more productivity out of your organization is to take the existing workforce you have, and… make them more productive. And really the biggest, and only broad way to do this is BI and analytics,” Peters says.

Data Collection becomes the Norm; BI becomes the Differentiator

The collection and use of data is transforming many industries – many relying on the cloud’s efficiency. For instance, data governance is required in some degree or another in financial services, healthcare, government and legal industries, many companies, including smaller ones, are being forced to collect data for legal reasons. This could mean more organizations are collecting data and will see a benefit in analyzing it.

But there are also some roadblocks.

“On the regulatory issues, it can work both ways. It’s a double-edged sword,” Peters says. “The more regulated industries have more maintenance requirements also have more restrictions on how the data is used.”

In contrast, companies like Facebook and Google have really led the pack in terms of showing the power of big data, yet they’re not mandated to collect all the data they do. “They are not shackled by regulations at all,” Peters says. The reality is that no one is forcing companies to engage in BI, but rather it’s chosen in a conscious effort to benefit and optimize their business.

Cloud computing has enabled many businesses to crunch the big data needed to draw big conclusions. Whether it’s a more traditional BI solution running on Infrastructure as a Service, or a SaaS-based BI suite, cloud hosting is opening up possibilities to do more with data than it can do on its own.

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