One of the primary benefits of shifting to the cloud is it makes it simpler to apply analytics and business intelligence (BI) applications against data residing in a centralized repository. Prior to the cloud, most of the relevant data inside any organization was distributed across applications running on any number of servers or devices. The problem is that it becomes difficult to make anything approaching a fact-based decision when the data residing in those disparate platforms conflicts. For that reason, savvier organizations are investing in BI applications that enable them to more easily consolidate data in way that allows them to make better decisions based on data that has been vetted by the organization.
The challenge for IT service providers that specialize in BI applications is that organizations are not making that shift as quickly as they'd like. A new market research report published by Dresner Advisory Services finds that less than a third (31 percent) use cloud BI today, and another third are considering it.
To make matters more interesting for IT service providers, 43 percent of the respondents have no cloud BI hosting preference. Of those that did have a preference, 32 percent cited BI/analytics hosted by the vendor that developed the application, compared to 25 percent that prefer third-party cloud providers. The preferred third-party cloud BI provider is Amazon Web Services (AWS), followed by Google Cloud and Microsoft Azure. Overall in 2017, public cloud BI use narrowly exceeds private cloud use.
All things considered, most IT service providers would prefer to exercise as much control over BI data as a customer is comfortable giving them. In an ideal world, an IT services provider would like to be able to host those BI applications in data centers they manage. Short of that, however, they can still add value to cloud applications hosted by vendors. It’s that just the margins on that service may not be nearly as high.
Uptapped potential for MSPs
The good news is the Dresner survey finds the number of organizations using cloud BI applications has increased 6 percent in the past year — largely driven by interest in visualization and self-service capabilities. Even better, 75 percent of the survey respondents identified managed services as either being critical, very important, or important when considering cloud BI applications.
It’s clear that two-thirds of the potential market for cloud BI applications remains untapped. There may be many organizations that for regulatory reasons would not consider a BI application hosted in the cloud. In fact, security is cited in the survey as the biggest barrier to cloud BI adoption.
Nevertheless, there’s still a massive base of customers that have yet to adopt cloud BI applications. Most of them are still running their businesses using spreadsheet data that is often wrong. Over time that reliance on spreadsheets leads to decisions being made because the data has never really been vetted. In contrast, data hosted in cloud BI makes it much simpler to apply a consistent set of governance policies to how data gets collected and entered in the application in the first place.
Obviously, there’s still much work to be done when it comes to BI applications in the cloud. But given all the upsides, it’s clear BI applications represent a cloud opportunity that MSPs should not ignore.