It has become generally accepted that cloud based Software-as-a-Service (SaaS) is the most cost effective option for companies seeking to develop or augment business intelligence (BI) functions. Faced with demands for increased computing power and the challenges of constructing their own analytic solutions, IT professionals often look towards SaaS, enticed by relatively low start-up costs.
A 2011 Gartner research study of 1,364 IT managers and BI platform users showed that approximately one third of respondents either plan to or currently use cloud SaaS to supplement core BI functions. “[D]espite growing interest, the market is confused about what cloud/SaaS BI and analytics offer and what they can deliver,” said James Richardson, research director at Gartner. “SaaS and cloud based BI is perceived as offering a quicker, potentially lower cost and easier to deploy alternative, although this has yet to be proven.”
Garter developed models to analyse SaaS costs, and found that while buyers often think SaaS is cheaper, the reality is not so simple. Gartner’s results suggest that SaaS is only cheaper during the first five years, but provides long term benefits of cash flow and reduced IT cost. SaaS can also provide faster deployment and insight where IT departments are unable to quickly respond to business demands.