But the survey data on cloud BI raises as many questions as it answers, in particular, about why organizations are still apprehensive about moving even a portion of their BI data and applications into the cloud. It will also no doubt influence the timing of Oracle’s staged roll out of cloud analytics which gets underway in earnest later this calendar year.
None of the main analyst groups provide public numbers on what proportion of the $14 billion business intelligence software market has switched to the cloud, but according to Oracle VP for BI and enterprise performance management, Rich Clayton, the figure is still very small.
“If you take all analytic cloud vendors today in aggregate, it’s less than 10% of the total market, maybe as low as 1%.” In contrast to that, the company’s survey data indicates that over 50% of decision makers in this area are considering moving at least some of their BI functionality to the cloud this year. And that is even more pronounced in areas such as sales and marketing, where 62% and 63%, respectively, say they’re looking at cloud BI adoption in 2014. Those are only slightly above Gartner’s latest survey numbers, which indicate 45% would put their mission-critical BI in the cloud, up from approximately 30% in 2013, and enough for the analyst firm to conclude “2014 may be a tipping point for cloud adoption as data gravity shifts to the cloud.”
Clayton is obviously pleasantly surprised with such feedback, and hoping those numbers are a true reflection of coming demand. “The main surprise was the level of interest. If you had asked me, I’d have said 10%-20%,” he says. (See our interview with Birst CEO Brad Peters for another take on the state of cloud BI.)
So what has changed, if anything? Judging from what Oracle is seeing, it looks more like demand is coming from line of business executives eager to use cloud services, rather than from the calming of previous anxieties (often on the IT side) about putting core data into the cloud.
There is one key factor influencing such apprehension, says Clayton. “Our thesis is that the value of information is directly correlated to its integration. While BI cloud specialists like Cloud9 Analytics have built packaged applications on top of Salesforce.com, such cloud applications data doesn’t live in a vacuum. In fact, the number one issue holding people back is not security, [as popularly stated], it is the integration of information assets between cloud and on-premise.” Or, indeed, concern about the lack of that.
A company of any real size is going to have applications both on premise and in the cloud, but analytics capabilities are always going to be centered where the majority of its data resides. And despite the spectacular rise of CRM, HR and other SaaS applications, that center of gravity today is still largely on-premise.
That is giving rise to some conflicting pressures. “What’s happening is that functional leaders are really pressing IT to change their model [for BI]. HR have gone out and bought a SaaS solution for recruiting, marketing have marketing automation, and they are saying ‘why can’t we have our analytics [in the cloud] just like we have our core application there.’ So the pendulum on governance is swinging towards business and putting them more in control.”
Roll out year
The signals about the market’s near-term potential may be mixed, but Oracle is gearing up to meet latent demand. It already offers its 12c database as a cloud service (through Oracle and Microsoft Azure cloud services). And on February 14, the company introduced a version of its analytic application for planning and forecasting that takes core Hyperion functionality into the SaaS world for the first time.
Finance users, often a skittish bunch when it comes to data in the cloud, should be sanguine about such a prospect, says Clayton. “Hyperion is a brand that finance has trusted for 30 years. So this is not a new product, more a new delivery method.”
That cloud-enabled accessibility and flexibility will allow existing customers to experiment more freely with new applications, Clayton maintains, but it will also open up Hyperion to a new audience: “Smaller business that may not have even contemplated Hyperion before can do so now — because they can afford it.” Pricing is set keenly at $60 per user per month.
But the main event of the year for Oracle analytics customers has yet to come — the delivery of the core BI suite as a service, reworked to ensure it delivers more of a cloud user experience and enhanced self-service. (When it will arrival in calendar 2014 has yet to be defined.)
“We are not just taking the current Oracle BI Foundation product to the cloud,” says Clayton. “Cloud users demand a much higher level of self-service,” and the BI product will allow business users to create their own models, rather than just reports — without relying on the help of the IT team. “So it is not an IT-owns-it, IT-manages-it experience. Rather, a business user who wants to analyze their marketing campaign data, for example, can upload from an Excel spreadsheet, connect that to Eloqua and have an application they can share with others.”
That approach is a direct response to the fact that the BI audience is no longer the IT organization, but is made up of business users. “CMOs, heads of sales [and others] are just basically saying, we’ve moving to the cloud, with or without IT. And I think analytics will follow that same pattern.”
Disclosure: At the time of writing Oracle is a diginomica premier partner.
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