Business Intelligence Gets SaaS-y

While IT budgets have changed significantly in the last six months, now is an even more important time for businesses to get accurate information faster to make quicker decisions, says Lodestar Solutions CEO Heather Cole, an IBM Cognos channel partner.

"The ability to make a better decision is absolutely key. The only way to do that is to have the right data available – and not have 10 different versions of the truth" – Cole

Over the next five years, the business analytics SaaS market will grow more than three times as fast as the total business analytics software market with a compound annual growth rate (CAGR) of 22.4% through 2013. The number of business analytics SaaS users will grow rapidly from a small base, however market revenue will remain low relative to on-premise software throughout the forecast period.

The overall business analytics market was worth $59 billion in 2008 (IBM).

The BI tools market grew 10.6 percent in 2008 to $7.8 billion, with SAP (20.4%), SAS (11.3%) and IBM (10.3%) holding the top three positions (IDC).

Combining analytic applications and performance management software together with BI platform revenue, 2008's market was $8.8 billion, up 21.7 percent from 2007, with the top three spots belonging to SAP, SAS and Oracle (Gartner). http://www.channelinsider.com/c/a/IBM/IBM-Targets-BI-Midmarket-560563

"The business analytics SaaS market is poised for rapid growth as more organizations turn to cloud-based computing and alternative deployment options. Growth expectations must be tempered as revenue generation gains traction behind user adoption." -- Brian McDonough, research manager for IDC's Business Analytics Solutions research service.

Several factors will help aid in driving this growth as more and more business analytics software providers move to address increasing market demand for software that is updated frequently, hosted offsite, and can be purchased on a subscription basis.

Capital expenditure policies and budget constraints make SaaS offerings more attractive as they enable departments to subscribe to software services using operational budgets.

IT resources are strained and there is insufficient time to build, buy, or evaluate specific solutions for various business problems, putting control of technology decisions into the hands of the business user.

Additional software functionality built on new platforms is suitable for SaaS delivery since there are well-established best practices that can be configured, rather than customized, through a flexible platform to suit most business needs.

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