The Wisdom of BI Crowds
A study by Dresner Advisory Services suggests that business users are winning the war with IT over business intelligence. Most new BI projects appear to be small in scope, and to favor emerging BI vendors.
While lower upfront cost isn't the only reason to consider open source software, it's one that initially gets the attention of many organizations. (I guess most of us are no different. When I'm shopping, I generally head to the clearance racks first. Who wants to pay full price if you don't have to?)
In fact, with a continued emphasis on reducing IT costs, organizations are "obliged to at least evaluate open source as an alternative" to traditionally licensed software, said David White, a senior research analyst for The Aberdeen Group, when I interviewed him about his recent report, "Open Source Business Intelligence: The Cost, Utilization and Innovation Factors that Matter."
That's especially true for business intelligence software, considering BI's reputation for elusive ROI. While there may be some cost/functionality tradeoffs, many BI users don't want a lot of bells and whistles with their software, Mark Madsen, founder and president of BI research and consulting company Third Nature, told me when I interviewed him in September. He said:
I think the BI vendors have over served the market. When you look at the products out there, it's just like the old spreadsheet, there are so many features that are almost never used. The open source products that are out there, whether it's the databases or the integration tools or the BI tools, they don't provide as much as the big, mature, proprietary solutions, but they cover the "good enough." They hit what 80 percent of the market needs. ... There's a point where you say, "Why do I want to spend $1,000 per seat when I can spend significantly less than that?
Business Objects and Cognos have been doing this for a long, long time. Are their tool sets more complete and rounded and have more functionality? Yes, they probably do. But is that a good thing? Not always.
There's a growing sense organizations might find it easier to attain a return on their BI investments by getting the software into the hands of more "average" users. In a recent piece of research, Dresner Advisory Services found that emerging vendors selling open source and software-as-a-service BI solutions are gaining ground on the big BI players. That's no big surprise. Dresner says more business units are implementing their own BI solutions, with little if any assistance from IT. More so than IT departments, these average users look at upfront costs and ease of use.
A few months ago I wrote about some of the reasons organizations use SaaS BI. As with open source, SaaS is winning fans among business users since it costs less -- at least initially -- and is generally simpler to use than traditional software. One factor in SaaS' favor, at least among users, may be that support is less likely to be a hassle. Aberdeen Group's White found organizations using open source software spend less money on their licenses, on BI hardware and on support services. Yet organizations using conventional licensed products for their primary BI solution reported fewer full-time employees were required to support it. This was especially true for large organizations.
At some point, IT will likely decide it needs to integrate a bunch of disparate BI software under a common application framework. With all these alternatives floating around, it'll have its work cut out for it. As I wrote last week, both IT departments and business users will be more satisfied with BI deployments if they compare notes a little earlier in the process.