1099RA Cloud-based BI/Analytics: A Top-Growth Business App Through 2013

What is Happening? While interest and hype surrounding Cloud-based analytics and BI solutions today are ahead of today’s actual rate of adoption, adoption is about to catch up to and pass the hype level.

Saugatuck’s 2012 research and analysis shows that, as of YE 2011, only about 13 percent of enterprises worldwide – including all industries and all sizes of enterprises – indicated that they had Cloud-based BI/advanced analytics solutions in place and in use.

But that same research shows that Cloud-based BI and analytics will be among the fastest-growing Cloud-based business management solution types through at least 2013. Figure 1 summarizes our survey data and analysis regarding Cloud-based business management solution adoption and usage growth through 2013 – and shows how Cloud-based BI / Advanced Analytics forecasts an 84 percent compound annual growth rate (CAGR) over this period.

Figure 1: BI and Cloud Business Solution Use and Relative Growth, 2011 - 2013

Source: Saugatuck Technology Inc., 2012 global SaaS survey; n = 228

Why is it Happening? The adoption and use of practically any type of BI / analytics solution today is growing, Cloud-based or otherwise. It’s growing because, when adequately developed and implemented, the software tends to deliver immediate, real, and recognizable business benefits to its users. Those benefits may be as simple as providing awareness of specific business process and resource costs; they may be as complex as economic models for market change and opportunity shifts. But they provide real-time or near-real-time business data in contexts that were otherwise too difficult or expensive to derive using previous methods.

The accelerating pace of adoption and use, especially as indicated by the data in Figure 1, are especially due to the Cloud-based nature of today’s leading solutions. Not only are acquisition and implementation costs and time minimal compared to traditional solutions, but most Cloud-based solutions can be adopted and used more quickly and inexpensively across more business operational areas, processes, and functions than can traditional solutions. This is the core nature and advantage of Cloud: Rapid deployment and short times to delivering real benefits across multiple areas of business, and from the bottom to the top layers in those areas.

Market Impact As our research indicates, virtually all categories of Cloud-based business software will experience substantial growth in adoption and use for the foreseeable future. However, the pace of growth among some of the early category leaders (e.g., CRM, collaboration, customer service) will naturally slow due to the rule of increasing numbers, whereas other categories will begin a much more accelerated phase of growth – including BI and Advanced Analytics.

While many of the faster-growing BI providers are selling a low-cost, integrated and suite-based portfolio of Cloud-based BI and business analytic tools / capabilities (e.g., Birst, Pentaho), other Cloud-based BI players have shifted toward a more targeted set of business process “beach heads” or around specific vertical markets – that in many cases help make the business benefits of Cloud-based BI more tangible for buyers. A great example of this trend is PivotLink, who has shifted gears over the past 12-24 months and is now primarily concentrating on the retail sector – with a focus on using Cloud services to help lower cost and integrate data from social sites with enterprise data, and to create insights about customers.

Similarly in this vein, Cloud-based solutions in the “Budgeting / Reporting / Planning” category (BI’s close cousin) are also experiencing strong sector growth – with firms such as Host Analytics and Adaptive Planning providing business decision makers with Cloud-based functionality to solve very specific business process problems (in this case budgeting and CPM, although each targets different customer segments within the market).

As is explained in detail in Saugatuck’s latest 14-page Strategic Research Report – Redefining Business Intelligence, Analytics, The Cloud, and The Future (1098SSR, 17July2012) – the concept of business analytics and BI has never been more popular than it is today. Analyst and media coverage emphasize gains in operational stability and reductions in costs; providers emphasize a wide (almost vast) array of business improvements.

But beyond the hype, interest in and use of analytics and BI in its many forms is being driven by the following factors:

Continuing economic uncertainty,
A focus by business leaders on low-cost, high-impact, measurable business improvement; and
A resulting focus by IT leaders on cost-effective, scalable, and quickly-implemented Cloud-based solutions.

The Research Report examines what Cloud-based BI is and can be, how it is being used to benefit user enterprises, how it can be expected to change in the coming years, and how to plan for and manage it to achieve full business benefits. The report is a compilation of ongoing Saugatuck Technology research programs, including our global survey and interview work with user enterprise business and IT leaders, briefings with Cloud and other types of BI providers, and our analysis of publicly-available, third-party market information from multiple sources.

The report is available for downloading by Saugatuck CRS clients and registered members of industry media by clicking here. Non-clients can purchase and download the report here.

Bruce Guptill

Most research firms can explain what happened; some can explain what is happening. Saugatuck Technology excels at understanding both in order to explain what else is likely to occur, and to guide its clients toward the actions that deliver them the greatest business value while enabling the safest business path.
To accomplish this, and to continually improve the value of Saugatuck’s work to clients in a Cloud-obscured marketplace, Saugatuck SVP and Head of Research Bruce Guptill pushes his team to continually re-examine and re-invent the company’s research programs to focus more on the costs, benefits, effects, and value of an ever-changing mix of technologies and providers in different markets.
Guptill’s own technology and business background laid a solid foundation for such a flexible, yet stable, approach to IT research value for clients. His technology research work includes mobility, collaborative IT, telecom, data networking, web commerce, and electronic marketplaces; his research work for enterprise IT and business clients includes return on IT investment, total cost of IT ownership, and business planning for IT. His research and guidance on vendor channel management, market identification and development, and buyer behavior analysis has enabled hundreds of established and startup IT providers to find, enter, and profit from new and traditional markets, while helping to guide user enterprise leaders toward optimal IT procurement and vendor management.
Guptill’s research background includes several years as a VP and research director with Gartner, senior positions with TeleChoice and Robert Frances Group, and editorial work within the IDG companies, including four years as a writer and editor with NetworkWorld. His marketing business focus was honed as VP of marketing for firms ranging from custom development providers to non-IT firms in aviation and other industries. His sales and channel experience started by traveling with a sample bag, then working for IT VARs, then advising telecom and wireless carriers on partner choices, to developing partner programs for traditional and Cloud-based software development firms and ISVs.
Guptill holds an MBA in marketing and finance, and a BA in the psychology and business of mass media communication. He is licensed to fly airplanes, drive boats, and sell houses; he is also a certified baseball coach, serves on the boards of regional civic groups, and is a serial home renovator. Married with three children, Guptill resides on Cape Cod in southeastern Massachusetts, and is a lifelong fan of the Red Sox, Patriots, Celtics, and the University of Connecticut Huskies.

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