More organizations plan to adopt cloud analytics, according to a 2014 Analytics Market Survey released today by Nucleus Research. That may be good news for vendors and business users — but CIOs should be on guard: This trend has the potential to create integration problems down the road.
The firm studied 73 deployments since 2011 and found that 61 percent of on-premise users are considering cloud analytics in the next two years. Meanwhile, 71 percent plan to increase their analytics investment budgets next year.
“Analytics deliver clear and increasing ROI, with 95 percent of survey respondents reporting having achieved a positive ROI,” Nina Sandy, analyst at Nucleus Research, said in a prepared statement. “That is likely to continue as customers take advantage of the initial and ongoing economies of cloud solutions.”
Nucleus Research analyzed its analytics case studies and found that analytics returned an average of $13.01 for each dollar spent this year. That’s up from 2011, when analytics yielded returns averaging $10.66. Shift to cloud BI, and you can improve that ROI as much as 1.7 times, the firm found in 2012.
While 93 percent of companies say they will stay with their current solutions, Nucleus notes that there’s still plenty of room for growth in this market, particularly in cloud analytics, which can more rapidly adopt new features.
Cloud analytics vendors may also find new clients among enterprise lines of business, according to a recent Computerworld article. Reporter Nancy Gohring spoke with several analysts who say they’re hearing about more cloud BI adoption within individual groups or departments.
The article doesn’t clarify whether these cloud BI projects are shadow IT via the cloud or company-sanctioned trials. If history is any indication, you can bet some of those projects are shadow adoptions, which may cause problems down the line. We’ll see.
Regardless, Gohring’s article provides an in-depth discussion of the pros and cons associated with cloud BI. You would expect integration to rank high as a concern, and you’d be right. Per Computerworld, on-premise offerings may include more third-party integrations, as well as broader features, flexibility and customization, according to Gartner analyst Joao Tapadinhas.
Experts also told Gohring that cloud analytics could become a bottleneck if you’re not careful about how much data you’re transferring between on-premise and the cloud. Moving too much data can affect network latency and performance, they warn.
This issue is discussed in more detail in TDWI’s free (with basic registration) checklist, “Demystifying Cloud BI: Six Issues to Consider,” if you’d like to read more about the challenges of moving data with cloud BI.
CIOs should take that as fair warning, especially since cloud analytics adoption may be happening piecemeal. Historically, individual business units have acted a bit selfishly when it comes to cloud, or really, most technology, failing to consider enterprise scalability, the potential to create data silos and other problems that might occur when use extends beyond the unit’s immediate needs. For their part, CIOs have taken an all-or-nothing approach to cloud and integration, which is one of four common mistakes IT makes with integration and cloud BI. The smart move is to take the middle path and work with small business units now as they test the waters with cloud analytics.
Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.