Cloud BI vs. SaaS
Continuing with our series on frequently asked questions by small and medium-sized businesses about business intelligence, today I'll address cloud BI and SaaS BI. They're not actually the same thing, though some of their characteristics overlap.
3) Should we choose an on-premise BI solution or one hosted in the cloud?
This can be an important distinction when choosing your shortlist of vendors; however more and more are offering both on-premise and cloud deployment models, including arcplan. If you're unsure, shortlisting vendors that offer both is a good plan. That way, you can choose the deployment model after deciding that the product's features match your needs.
Choosing whether or not to deploy BI in the cloud brings up some special considerations – how concerned about data security you are, where your data will be stored, and whether you have the resources in-house to manage the hardware necessary for your BI deployment.
If data security is a major concern, there are ways to store your corporate data securely behind a firewall and broadcast queries to your cloud BI system. As we often say at arcplan, you don't necessarily have to move your data to the cloud in order for your BI to be there. That may seem confusing, so let me clarify. You can buy BI licenses up-front (unlike what you'd do with a SaaS model where you pay over time) and deploy them in the cloud to save on IT resource costs. With this model, you'd either choose your cloud vendor (Rackspace, Amazon…) or you'd likely work with one of your BI vendor's partners. In our case, gnuhat offers arcplan in the cloud. They provide a secure, private cloud in which to host your arcplan instance as well as top-notch support. With gnuhat, you can also spread your arcplan license costs over time if you need to spend less on your BI project up-front. Especially when working with SMBs, BI vendors need to be flexible when it comes to purchasing options.
If you're concerned about taking ownership of more IT infrastructure, a cloud deployment might be easiest since you don't have to deal with in-house hardware management, upgrades, and maintenance.
We have a number of resources on this blog that can help in your decision to employ the cloud or not.
4) Should we consider SaaS?
This might seem redundant, since many people believe SaaS and cloud are the same thing. Your BI can live in the cloud and not be SaaS (via a model like I described above where you purchase your licenses up-front). Normally though, Software as a Service business intelligence means applications are deployed outside your company's firewall at a hosted location and accessed by users via the internet. User licenses are paid for on a monthly basis and you don't truly own them; you simply pay for use of the software. For some companies, this is a good idea. It lets you "try out" BI software for a period of time (say, two years), and if it works out, many times your vendor will let you purchase the licenses for a reduced cost since you've already paid into them over time. It's like renting-to-own.
Many traditional BI vendors offer a SaaS option – just ask them. No, they aren't generally offering "true SaaS," but you will be able to get the same product features and functionality while spreading the cost over several months or years. If you're an SMB with a limit on how much money you can spend on BI up-front, SaaS is a valid option. But after about 2 years, you'd break even on what you could have spent by purchasing your software licenses up-front.
Advantages of a SaaS BI deployment include:
- The cost is considered an operational expense rather than a capital expense. It's easier to get approval since it requires less cash up-front.
- The same benefits you get with a cloud deployment – scalability, no hardware to maintain, 24/7 availability, etc.
- Quick implementation. While SaaS can be customized, most often you'll come across SaaS BI that is pre-built as a solution so you can get up and running quickly.
Adopting a SaaS BI model does warrant some additional considerations. You relinquish control of your data – it lives on the servers where your instance is hosted – and you don't have direct access to the physical hardware. Business teams must trust their providers and take precautions to protect their valuable data. SMBs should evaluate vendors very carefully in order to mitigate unintended consequences of employing a SaaS model while reaping its rewards.
My next post will cover data management!