Succeeding with SaaS
I’m hearing a lot success stories about deploying BI in the cloud. I believe these stories are just the tip of the iceberg.
Last week, I delivered a Webcast with Ken Harris, CIO of Shaklee Corp., a 50-year old natural nutrition company, which has run its data warehouse in the cloud for the past four years. (Click here for the archived Webcast.) And this past year, ShareThis and RBC Wealth Management discussed their successful cloud-based BI solutions at TDWI’s BI Executive Summits this past year.
The adoption of the cloud for BI is where e-commerce was in the late 1990s: people had heard of e-commerce but laughed at the notion that a serious volume of transactions would ever take place over the wire. They said consumers would never embrace e-commerce for security reasons: people with network “sniffers” might steal their credit card numbers.
We all know how that story turned out. Today, e-commerce accounts for more than $130 billion in annual transactions, about 3.5% of total retail sales, according to the U.S. Census Bureau.
According to TDWI Research, a majority of BI professionals (51%) are either “somewhat familiar” or “very familiar” with cloud computing. About 15% of BI programs have deployed some aspect of their BI environment in the cloud today, but that percentage jumps to 53% in three years. And 7% said that either “half” or “most” of their BI solutions will run in the cloud within three years. That’s according to 183 respondents to a survey TDWI conducted at its November, 2009 conference in Orlando.
At Shaklee, the decision to move the BI environment to the cloud was a no brainer. Says CIO Harris: “It was an easy decision then, and it’s still a good one today.” Formerly a CIO at the Gap and Nike, Harris has many years of experience delivering IT and BI solutions so his word carries a lot of clout.
Harris said his team evaluated both on-premise and cloud-based solutions to replace a legacy data warehouse. They opted for a cloud-based solution from PivotLink when the vendor was able to run three of the team’s toughest queries in a three-week proof of concept. Once commissioned, PivotLink deployed the new global sales data warehouse in three months “versus 18 months” for an on-premises system, said Harris.
PivotLink “bore the brunt” of integrating data from Shaklee’s operational systems. Although Harris wouldn’t say how much data Shaklee moves to its data warehouse daily, he said the solution has spread organically and now encompasses all sales, cost, and marketing data for Shaklee, a medium-sized home-based retailer. And since Shaklee has no internal resources supporting the solution, “the cost savings are big” compared to an on-premise solution, Harris says.
SaaS Vendors. Harris was quick to point out that not all Software-as-a-Service vendors are created equally. Harris has used a number of SaaS vendors for various applications but not all have worked out and he has pulled some SaaS applications back in house. “You need a vendor that really understands SaaS, and doesn’t just put a veneer on an on-premise piece of software and business model.”
Harris added that the challenge of implementing a SaaS solution pales in comparison to the challenge of implementing BI. “SaaS is easy compared to the challenge of delivering an effective BI solution.”
Posted by Wayne Eckerson on November 23, 2009