The definition and requirements for BI have simply outpaced the practical vision when the term “Business Intelligence” was coined by analyst Howard Dresner. Today BI not only represents the convergence of information integration, aggregation AND analysis, it’s viewed as the user experience that’s leading the information revolution. This heady stuff is what makes Ray’s report so relevant.

The Information Management Matrix Drives Next Gen BI

I asked Howard for his updated definition in 2003 and he jokingly said “indoor computing.” BI’s expanding scope was good for him and the Gartner practice he led back in those days; though I’m not sure it has served the community long term. Vendors have exacerbated the problem with homogenized BI platforms that have more to do with lock-in than innovation – another point highlighted in this report.

Ray’s “Information Management Matrix” (above) is a great way to frame-up the requirements for a modern BI strategy. These include addressing exploding data volumes, types and sources and new visualization and reporting paradigms that must transcend “traditional charts, gauges, and dials.” I also agree with Ray on the expanding “approaches and styles” – all of which reinforce my belief that a one-size-fits-all BI model is no longer appropriate, if it ever was.

Put another way, you wouldn’t use a Porsche 997 Turbo to do the work of a 40-ton Freightliner, though both are classified as transportation. Let’s ask the “Megavendors” (Gartner’s term) or “Titans” (Dresner Advisory Services): Why layer on more complexity in an effort to create an all-encompassing and inclusive BI platform?

If we give the old BI guard the benefit of the doubt, then buying from a single vendor is about improving interoperability and reducing sustaining costs, something I discussed in a recent post. The follow-up question I’d ask, particularly after seeing their user ratings from Dresner’s “Wisdom of the Crowds Business Intelligence Market Study,” is, how’s that working for ya?

Other top analysts are raising this question too, including a Gartner webinar with Rita Sallam and Kurt Schlegel on traditional BI stacks.

Their webinar offered great insights on information delivery and analysis capabilities and which vendors are best positioned to deliver these capabilities (full slide deck here). Among their top recommendations:

1. “Ensure your organization can deliver the major BI platform capabilities, Go beyond reporting to include analysis;

2. Don’t make your BI standardization all about homogeneity, Standardize by capability and use case;

3. Stack is not always better, Don’t buy blindly into the stack”

Source: “Using Gartner BI Platform MQ to Standardize Your BI Capabilities,” May 12, 2010, Gartner, Inc.

If you believe there’s another motive, such as Ray’s point on “vendor lock-in” that can cost your organization flexibility, time and independence, then his seven best practices are a great reference for selecting vendors. The criteria Ray proposes (paraphrased here) fit perfectly with the attributes of Cloud computing and a SaaS purchasing model:

1. Enable all types of users

2. Support differentiated processes

3. Stay flexible

4. Avoid vendor lock-in to one set of technologies

5. Expect to move beyond departmental

6. Factor in existing infrastructure

7. Apply selection tools

IT executives have to deal with the post-purchase BI challenges involving integration, sustaining overhead, planned retirement and replacement costs. These are real drivers for consolidation in BI, although no single Megavendor has yet to create a better mousetrap. BI crossed into the commodity category many years ago, and open source BI vendors have highlighted that with an exclamation point. But shouldn’t things like interoperability, reduced training and better support be addressed by published open standards? Again, how’s that working for ya?

Data Deluge

The Altimeter Group report highlights a number of important trends, among them the exploding volumes and types of data. A recent Silicon Republic article about EMC’s acquisition of Greenplum touches on this as well:

“In a recent report, IDC predicted that over the next 10 years the amount of digital data created annually will grow 44 fold. Companies are increasingly turning to new architectures and new tools to help make sense of this ‘big data’ phenomenon.”

Not only is data exploding, it’s growing faster outside an organization’s firewall than within it. E-commerce and social networking websites generate terabyte transaction log files weekly, and in some cases daily. RFID data was a precursor to what mobile devices beam up in terms of geo-spatial (latitude and longitude) information. If it hasn’t already, machine-to-machine data will surpass all other forms of real-time transactional data.

This all translates into a brave new world for BI, where decades-old designs are no longer the safe choice for dynamic organizations that need to analyze mountains of information. All designs must accommodate data from outside an organization to support web services-style integration as the foundation of a BI strategy. Master data management (MDM), data quality (DQ) and data governance all need to extend beyond the four walls of organizations to support data integration from extended value chains for collaboration with customers, suppliers and government regulatory entities. The bottom line: You cannot hope to bring everything in-house and lock it down with BI approaches of the past.

Next Gen BI Requirements

Ray’s summary, “Next Gen BI Must Reflect Emerging and Evolving Business Requirements,” is very consistent with what we hear from PivotLink customers. In particular:

Support role-based designs. I’ll amplify Ray’s point #1 that a role is about ease of configuration. Role-based design is not about having the software vendor determine the role of an individual in an organization. A rigid, pre-defined role-based approach is NOT the goal. Configuration and user self-service is. Ray reinforces this important theme in points 7, 9 and 10.

Align with configurable and adaptive business processes. I love point #4, as it’s really not about a vendor or a specific technology, but what that technology is used for and the ease and speed with which a BI platform adapts to new requirements in the customer’s business. If your BI requirements involve dynamically changing and evolving data sources, new fields, new calculated members and new workflows, don’t assume that’s in the next release of the underlying enterprise application software.

This raises some important questions: When do you actually require a BI platform, and why? Is everything with dashboard lipstick on it really BI? My belief is that transaction systems and BI platforms are still different and each is compromised when we try to make them do both in real-time. Users will no longer wait months for a solution. I believe the more that end users can support their own ad-hoc exploration and reporting, the better the business results. We’ll touch on these in more detail in upcoming posts.

New Approaches

There’s hope on the BI horizon. Look to the new kids on the BI block, whether you call them Cloud, PaaS, or SaaS BI vendors like PivotLink (cited in the report as a “Pure Play best of breed” example). These Next Gen BI players have the most to gain and least to lose in creating a true, interoperable platform that leverages the rapid advancements in Cloud based computing.

Thanks again to Ray for this fresh look at BI. He’s become the Peter Townsend of the BI generation, reminding everyone: “…don’t get fooled again.”

Is your organization achieving success using some of the principles in Ray’s report? Post a comment below to share your tips and lessons learned with other PivotLink users or shoot Ray a note on Twitter @rwang0. Check out his blog at “A Software Insider’s Point of View,” learn more about Altimeter Group, or read the full report here.

1. IT has a critical role assuring that the right service is purchased.

SAS 70 Type II is different from SAS 70 Type I, which is less rigorous. SAS 70 Type II shouldn’t be confused with SAS 70 certification for the data center. Beware of cloud providers that use these terms loosely. It is important to specifically ask if the entire service and not just the data center is SAS 70 Type II certified.

For another good read about practical up-time and the costs involved in doing so, check out this post on the SmoothSpan blog.

Best in Class companies cited several keys to successfully using BI, such as:

1. Ease of use

2. Identifying areas to obtain rapid ROI Deploying BI enterprise-wide

3. Integrating multiple data sources for operational BI applications

The report also confirms 61 percent of respondents focus on key enablers critical to the success of business intelligence in retail. Traditionally one of the most data-rich BI industries, retail companies often have multiple points of sale sources with large volumes of SKU-level detail data and dynamically changing distribution channels. Key enablers include:

Flexible data collection: Business or customer-centric data must be collected from various sources and integrated with the BI solution.

Ease of data assembly: Data must be cleaned and aligned with other daa sources to establish relevant correlations.

Data delivery and view: The ability to customize the user experience in order to ensure relevant stakeholders view information in a way that lends itself to actionable decision-making.

You’ll find great insights into how The North Face addresses these challenges with PivotLink’s SaaS BI platform in a recent STORES magazine interview with Sarah Jones, the company’s manager of retail floor space management.

Aberdeen’s report highlights another telling sign that SaaS BI is gaining momentum in retail – more “Best in Class” retailers use SaaS BI than desktop BI tools (28 percent) and on-premise client server solutions (33 percent).

The results customers achieve with SaaS BI are very impressive:

Potbelly’s success with PivotLink and DMA: “After a pervasive BI implementation, information regarding changing customer needs was made available not only to top business executives, but to purchasing, forecasting, and customer-facing executives and managers as well.” I recently blogged about DMA CEO Bob Sala’s presentation at SaaScon, where he discussed emerging trends in supply chain analytics in foodservice and food distribution for customers like Potbelly.

Rossignol’s success with PivotLink: “After implementing a new BI system and focused on ease of use as a top priority, the organization was able to achieve faster time to actionable data, a major competitive benefit.” Find more details in Doug Henschen’s article “SaaS-Based BI Tracks Rossignol Ski and Snowboard Sales” in Intelligent Enterprise. Read the case study.

CarToys’ success with PivotLink: “CarToys was looking for a solution that would promote high levels of usability within the enterprise…and reduced dependence on IT departments…” adding that after implementing SaaS BI, the company’s ability to increase usage across departments and among C-level executives helped demonstrate ROI. For more details, see the case study.

Hats off to Potbelly, Rossignol and CarToys! We always knew you were “Best in Class” companies.

While industry pundits debate the announcement’s implications for mobile computing, the untold story is what SAP isn’t saying about BI to those CIOs with hundreds of thousands of dollars invested in their software. As customers, partners, analysts and media enjoy SAP’s confab in the Sunshine State, here’s what I’ve been thinking about.

The acquisition validates PivotLink’s approach

I applaud SAP for acknowledging the limitations of old approaches to analytics, and for recognizing that BI innovation lies not in cubes, but in columnar data storage, in-memory processing and schema-less data models. PivotLink pioneered this approach nearly a decade ago. The news is a sign that old world companies continue to slowly accept the new realities around SaaS and Cloud computing, as customers look to tap SAP and non-SAP data anytime, anywhere. While acquiring Sybase may not reflect a singular focus on BI, the merger may give customers hope that SAP is heading in the right direction.

PivotLink’s platform is powering BI analytics for SAP customers like REI, Our365.com, Novell and a well-known West Coast apparel manufacturer and retailer. These companies, and new customers like a premium outdoor clothing manufacturer, chose PivotLink’s market-leading SaaS BI platform over SAP BusinessObjects and SAP Business Warehouse to tap data from any Cloud or internal data source.

While PivotLink innovates, SAP will integrate

The reality is the market has moved to a new BI model. While the old guard offers product roadmaps and the possibility of integration, PivotLink, and our partners, will extend innovation even further. Its good database and mobile platform aside, Sybase is also widely known as the company that thought a lot about BI, but couldn’t perfect it.

The market’s embrace of PivotLink’s SaaS BI solution, and the company’s burgeoning growth, is clear evidence of this juxtaposition between the old guard and new guard.

The shift away from legacy systems is one of five key BI trends we highlighted for 2010 and was the focus of Quentin Gallivan’s recent post about the “Wisdom of Crowds” Business Intelligence Market Study^™. The landmark study showed that SAP’s IT and business users found a lack of innovation coming out of Walldorf, Germany and experienced diminishing returns during the past three to four years.

Howard Dresner, author and BI über-analyst,  suggests this new wave of BI innovation is something the industry should closely watch:

“The ‘Wisdom of Crowds’ study is a unique perspective for measuring BI vendors and products based on users voicing what actually happens in the real world. It reveals the inflection point that has occurred and is driving a surge of innovation and adoption in the ‘Emerging’ segment. As BI 3.0 unfolds, the market should keep a close eye on ‘Emerging’ companies that are a great source of innovation in the market.”

This brings me to the point BI aficionados should consider:

Customers will shoulder the cost of SAP’s indecisive BI strategy

SAP’s BI strategy has been a long, convoluted road for its customers to endure over the last decade. SAP Business Warehouse was intended to be the final word in BI. In 2002, NetWeaver, acquired from TopTier Software and renamed, became the face of SAP BI. In 2006, SAP acquired Business Objects. In 2008, SAP addressed performance issues with Business Warehouse by purchasing in-memory accelerator technology that required racks of expensive, dedicated database blades.

So SAP will pay $5.8B for Sybase, on top of the $6.8B to acquire Business Objects and time spent reconciling its products with NetWeaver and Business Warehouse Xcellerator. Now CIOs can look forward to adding Sybase ASE and Sybase IQ to the mix. So is this what BI customers are really asking for? Will SAP produce a BI architecture that makes analytical applications quickly deployed, easy to use and headache-free for IT? It remains to be seen whether business value will ever trickle down to SAP customers.

In the meantime, we will continue serving SAP customers who want PivotLink to augment (read, fix) BI systems that can’t deliver the insight they require.

Let me know what you think.

CIOs and line-of-business executives also told us they needed to change the way they worked. Business users yearn for instantaneous insight into their business and the ability to manage dynamic market changes without burdening IT, while IT wants to focus more on the strategic direction of BI environments and less on building ad-hoc reports. For some time, we’ve called this emerging market trend “The New BI.”

Defining the New BI

The New BI produces quick BI wins that are elusive with legacy systems. This means that deployments take days or weeks, not years to deploy. With business user self-service, the New BI puts affordable, secure and easy-to-use analytic reports and dashboards into the hands of business users and empowers them to make timelier decisions with minimal IT involvement.

The New BI extends beyond the enterprise and provides business insight to the entire supply chain because it is delivered via SaaS and collaboration-driven. It provides powerful and scalable enterprise class service. And the New BI is on-demand and in the Cloud.

The New BI transforms the market

Now, Howard Dresner, one of the foremost thought leaders in Business Intelligence and Performance Management, validates what we’ve seen. Findings in his new “Wisdom of Crowds” Business Intelligence Market Study™ reveal a dramatic shift away from traditional on-premise Business Intelligence software in favor of solutions from “Emerging” BI vendors, such as PivotLink. The study of 457 business and IT professionals ranks 15 leading companies’ products, with PivotLink users confirming a 100% recommendation and other top ratings as compared to peers and the overall sample.

© Dresner Advisory Services, LLC

PivotLink was the only pure Software as a Service BI vendor ranked in the study. Vendors were grouped into three categories based on general market profiles: “Titans,” “Established Pure-plays” and the “Emerging” vendors group combining SaaS, open source, visualization tools and desktop tools.

Wisdom of Crowds maintains that between 2006 and 2007 there was an inflection point when companies large and small shifted from traditional, on-premise business intelligence solutions to those offered by a set of emerging BI vendors, like PivotLink, because they offered greater technical innovation, customer support, and overall value. [See Figure 21 – Vendor Deployments Over Time]

The New BI offered by PivotLink is a clear alternative to the costly and complicated deployments required by the on-premise solution providers. If companies are seeking quick BI wins, a deployment measured in days, not months or years, is one of several key indicators of success.  Wisdom of Crowds indicates that increasingly businesses recognize this distinction, and the PivotLink advantage.

Customers win with the New BI

Wisdom of Crowds also indicates that customer satisfaction today is greater with “Emerging Vendors.” Customers scored emerging vendors consistently higher than Titans and Pure-Plays in every category, particularly in key categories such as sales experience, value for price, technology, tech support, consulting and whether the vendor would be recommended. [See Figures 27, 29, 31]

As the only pure SaaS BI vendor to be ranked, PivotLink scored higher than all “Titans” and “Established Pure-plays” in overall-value. PivotLink achieved a 100% score from respondents who would recommend the company. No “Titan” or “Established Pure-play” received similar endorsements. Pair this score with PivotLink’s 100% renewal rate among existing customers last quarter, and it’s clear that the company is setting the standard for value among SaaS BI vendors.

Business users driving more BI deployments

Howard’s study also notes a sharp increase in functional alignment, stating that “business users appear to be growing in influence,” particularly in North America. [See Figure 7 – Business Intelligence Adoption by Function/ Time] While “Emerging” vendors are gaining an initial foothold in smaller organizations and among business users, the study highlighted the dramatic scalability of deployments among some “Emerging” vendors.

Detailed findings cite a significant number of PivotLink deployments over 1,000 users and in organizations with more than 10,000 employees. Conversely, the study sample indicated that Birst and Good Data deployments were limited to less than 100 users in much smaller organizations. [See Figures 23 and 24] Howard also notes that he was unable to rank Birst, Good Data and other emerging vendors “due to small numbers of completed surveys.”

Legacy BI vendors have forced unfair compromises between the business side of the house and IT – one of the hot debates at this year’s Gartner Business Intelligence Summit. We’ve found that SaaS unites these environments: IT is more inclined to embrace a solution that makes business users more effective without diminishing IT’s crucial role and guidance in data governance and management. PivotLink allows IT and business users to be successful at what they do best.

For instance, with the latest 4.3 release of the PivotLink platform and the new PivotLink ReadiMetrix product family, with initial analytical applications for Sales, Marketing and Human Capital Management, PivotLink and its partners are helping business users at Taleo and Internap achieve quick BI wins.

Through these efforts, PivotLink’s driving the next wave of innovation in BI. Howard sums it up best, noting “As BI 3.0 unfolds, the market should keep a close eye on ‘Emerging’ companies that are a great source of innovation in the market.”

We salute Howard for taking a fresh look at the Business Intelligence market with this study, and we thank our users who spoke volumes about the success they’re achieving with PivotLink.

To learn more, I recommend registering and tuning in for Howard’s take on the study in a webinar on June 16 at 10 a.m. PDT.

In the meantime, I’d enjoy hearing any anecdotes or use cases that you’ve encountered that show how the New BI is taking off in your patch. Just drop me a line or post a comment.