YOU’VE PROBABLY HEARD A LOT OF BUZZ ABOUT BUSINESS INTELLIGENCE LATELY…
And you likely know that it’s something you’re going to need to keep your business competitive in an increasingly data driven marketplace—you’re just having trouble cutting through the noise, or knowing where to start.
Right off the bat you’re faced with an extremely important decision: whether to make a one-time investment in hardware and software (on-premise), or lease both components through a cloud based service. Over the last year, another option has emerged and it’s what we believe the BI industry has been waiting for. But first, let us explain why we’re excited about it and why we think companies everywhere will benefit.
3 FACTORS: COST, PERFORMANCE, AND SECURITY
And finding the correct balance between these three can be one of the main drivers determining the success or failure of a BI project.
On-premise BI is the tried and true approach used by companies worldwide for the last 15 years. We believe that soon it’s going to be considered outdated with fewer and fewer companies using it. Why? It’s prohibitively expensive and time consuming to setup and maintain. The setup process goes something like this: Have your IT group try to predict how much space and performance you’re going to need over the next five years, buy a physical server or three to support that estimation, and then pick up some enterprise level software. Once you’ve got everything ordered, you then have to hope your team has the expertise to install, configure and maintain it. By the time everything is up and running, there is a good chance your business strategy has changed, and this is all before the BI project itself has even started. Over and over again, we’ve seen companies spend months and months, and tens on up to hundreds of thousands of dollars just getting their on-premise BI environment up and rolling.
For most of the past 15 years, this on-premise option was your only option. In addition to being required to outlay this very significant investment in time, money and other resources, and facing the risk that your company’s strategy will shift by the time setup is complete, you’re also going to face the hard reality that the average lifecycle of hardware is 3-5 years, which means you’ll be repeating this process more often than you’d like. You’ll also be required to keep the team that supports it up to date with training.
A SIGNIFICANT EVOLUTION IN BI CAME WITH THE INTRODUCTION OF CLOUD BASED ENVIRONMENTS.
A pay as you go, only for what you need at the moment option. There was no longer a need to buy 1 terabyte drives when all you need is 10 gigs today. Now your business intelligence platform is flexible and can grow with you. We’ve seen the cost savings for our clients, and they are dramatic compared to on-premise. For one client, we estimate a 70% savings by going with a cloud option.
Not only does the cloud provide flexibility in growing, but another benefit is that it can also scale down as well. Say you need to cut your BI budget for unforeseen reasons – had you invested in an on-premise platform all of those cost would be unrecoverable.
And what about support costs? Cloud based environments include cost saving features, such as providing the ability to have automatic database backup and disaster relief plans from day one, which means you don’t need to pay a DBA to work weekends anymore. And one of our favorite benefits? Setup that takes minutes, not months.
Another advantage of a cloud based environment is the advanced technologies that the cloud can offer, making sure your company is always on the forefront of technology. In particular, Microsoft Azure and Amazon AWS have both introduced columnar, elastic and MPP data warehouses. Historically, if you wanted to incorporate this type of technology into your on-premise environment, you’d need to install an appliance like Teradata, which brings with it a TCO that potentially runs into millions of dollars. The cloud gives you the ability to start small and quick, and grow as your BI project does while being able to take advantage of technology that would otherwise be out of reach with an on-premise solution.
BUT WITH ALL THE UPSIDE THAT A CLOUD BASED ENVIRONMENT BRINGS, THERE’S ONE GIANT CONCERN. SECURITY.
And the big guys know it. “Security is the biggest blocker not just for Azure adoption but for cloud adoption generally,” Stevan Vidich, director of Windows Azure marketing, noted at the Microsoft Management Summit (MMS) in Las Vegas.
Is there a way to get all of the benefit of the cloud without compromising security?
As we alluded to earlier, there is now a 3rd BI environment option available that provides all of the benefits without the security concern of the traditional cloud option. ENTER THE HYBRID CLOUD. A hybrid cloud gives you the best of both worlds, so you can take advantage of the benefits of the “pay as you grow” plan, except now you can extend you’re company’s network through point to site or site to site networks. The end result? A Business Intelligence platform that’s both cost effective and secure.
Reach out to ask questions or to get started.
Although there are many considerations in starting a new BI project, we can’t help but feel the Hybrid cloud is the way of the future. The perfect balance of cost, performance, and security. It would appear the big players all agree – as Microsoft, Amazon, HP, and EMC have all begun offering Hybrid clouds over the last year. Not sure what’s right for you? Contact us and we’re happy to discuss your options.
Trent has been a CFO of two venture/growth equity-backed companies that ranked on Inc. Magazine’s list of fastest growing companies in the country which he successfully led from their infancy to full liquidity events. He began his career as an Analyst in investment banking with Deutsche Bank. He was then a Senior Financial Analyst for a $200 million business unit of Honeywell. He then returned to investment banking as an Associate and then VP at Wachovia Securities and Sagent Advisors respectively. He worked with media, digital media, telecom, software/SaaS, and internet infrastructure companies on transactions that varied from multi-billion dollar LBOs to small growth equity capital raises. Trent is now a partner at EP and is the head of EP’s Utah valuation practice.
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