BI at SaaS Speed

Winston Churchill once said that “difficulties mastered are opportunities won”. His quote is very applicable to the the effort of building BI in the cloud. GoodData announced earlier today that May 2011 was our biggest month ever, so it is good time to look at difficulties and opportunities of BI Cloud in greater detail.

Business Intelligence is a huge opportunity. Even in its current, dysfunctional, on-premise form it is $10B software industry. And on-premise BI is extensive and expensive IT initiative that involves building a complete chain of data integration, data-warehousing, dashboarding and visualizations. On top of the IT efforts comes tricky business part: what to measure, what are the right metrics, how to present them and to whom. And it all has to happen at the speed of business, not at the speed of IT.

This IT/business dichotomy leads to extremely low success rate of BI projects – as much as $7 billion annually is spent on BI undertakings that are considered failures. That’s right – $7 billion worth of BI software ends up sitting on the shelf every year!

On the contrary the SaaS model works best when the product is well defined, customer adoption is fast, satisfaction/loyalty is high and cost of servicing the customer is low (for more information on SaaS metrics please read “Top 10 Laws of Cloud Computing and SaaS” here). This means that the traditional, slow moving, complex and expensive BI will NEVER make it to the cloud. Numerous small and large companies have tried to host their traditional on-premise BI products in the cloud, but SaaS laws are called laws for a reason – these companies either failed already or will eventually fail.

So what is GoodData doing differently to master the difficulties of Cloud BI?

1. Product Definition/Customer Adoption – in order to make customer adoption as quick as possible, we are building a set of BI applications. These apps are templates that contain not only connectors to standard data sources (such as Salesforce, Zendesk and Facebook) but also complete dashboards and reports that incorporate best practices in the form of metrics. Our Sales Analytics app helps you measure predicted revenue. Our Helpdesk Analytics app measures your backlog and resolution times. Our Marketing Analytics app teaches you how to calculate campaign ROI. We’re adding these applications on a weekly basis. You can see the full list of our apps here: http://www.gooddata.com/apps

2. Customer Loyalty – We deliver a complete, managed service to our customers. Our developers, ops and support personnel are making sure that every single data load goes as planned, all reports are loaded correctly and that there are no performance issues. We even publish our Operational & Service Performance here: http://www.gooddata.com/trust

3. Cost of Service – We’ve architected a very different platform that allows us to host a large number customers at a relatively low cost. The platform is so different that we often have a hard time communicating it to the BI analyst community (concepts like REST APIs and stateless services are not part of normal BI nomenclature). And the flexibility built into the platform allows us to move at the pace of business and not the pace of IT: we deliver a new version of GoodData to our customers every two weeks and we make tons of changes to customer projects daily.

Even the fact that we know how many reports we served to our customers in May of 2011 (over 1,000,000) sets us apart. While the old BI industry can only guess the level of adoption and product usage (of shelfware) we actually know. But again, “difficulties mastered are opportunities won”!

BI doesn’t lend itself to SaaS? Yes and no!

Can you agree and disagree with someone at the same time? The quote below comes from Rob Ashe, general manager of IBM’s business intelligence and performance management unit:

BI doesn’t lend itself to SaaS. Every company is different because even if transaction systems are the same the decision making process is different. Unlike Netsuite or a CRM application where everyone does the same basic things, BI uses a different model every company. The one to many model doesn’t work.

And while I agree with Rob that it’s the “intelligence” part that makes hosted BI difficult it is not impossible to provide BI as a service. Capturing the data model and sharing it with users will be a core piece of Good Data…