Cloud BI vs On-premises BI

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We hear a lot of talk today about moving business intelligence to the Cloud. The Cloud, pundits promise, will give us access to our data anytime from anywhere on any device. Plus, they say, using the Cloud will foster greater online collaboration as well as enable us to respond quickly to changes in our business environment. Sounds great, but what should you consider when deciding whether to move your business intelligence platform to the Cloud or keeping it on premises? Thinking about these three factors will help you determine which is right for you: cost, time, and risk.

Cost

The biggest single cost saving of going to the Cloud is usually the capital investment related to infrastructure. Depending on your selected business intelligence solution, your on-premises option may require additional hardware. You may also need appropriate facilities for the hardware—maybe it’s just an extra office or maybe it’s part of an environmentally-controlled computer facility. In the Cloud, this equipment is owned and managed by the host, so there is no capital expenditure for hardware required with a Cloud solution.

Many Cloud host companies provide a nearly unlimited capacity to grow. While over time your cost may increase because you may need to add users to access the solution, you will not experience large step increases as you would when, for instance, hardware capacity would need to be increased if your solution were on-premises. Additionally, some Cloud hosts are very flexible in terms of growth of both processing and storage, allowing you to use more capacity when you need it—for days or even hours—and then allowing you to return to previous levels, paying for only what you need when you need it.

Further, operational expenses may be lower with a Cloud solution—the fees paid to the host cover hardware and operations, including personnel costs, and those costs are kept down by leveraging the host’s economies of scale from serving many clients. But keep in mind that, unlike a capital expenditure where you have a one-time payment, the fees you pay will not decrease, but will probably increase over time. Plus you may not get the same tax benefits.

Software licensing for the Cloud can be done different ways and in order to compare costs, you need to know what options are available. If you are using a software-vendor-independent Cloud service, you can license the software and install it in the Cloud. In this case, the software cost of the Cloud solution will probably be the same or similar to an on-premises solution. You will need to consider the cost for any customizations and integrations as well, which will also be the same or similar for either option.

Time

A Cloud solution can save your organization time in implementation, expansion, and use of your BI system. With a Cloud solution, your original implementation will probably be faster and easier, primarily because you won’t have to deal with a hardware component.

A Cloud solution can also enable your organization to expand the solution quickly to any number of users. All of your users will be on the same version, saving time on training and support.

Using the Cloud can also save your individual users time in their regular use of BI, depending on the speed and reliability of the system. To make sure the Cloud saves your users time, you should research not only the speed of the Cloud technology, but the ease of use and user and customer support of the Cloud technology as well.

Some Cloud solutions, such as software-vendor-hosted Cloud solutions, generally available for more expensive, more complex BI solutions like SAP, can save even more time because the basic software is already installed, but beware of set-up time, customization and integration time, and higher fees.

Risk

A Cloud solution can change the whole risk dynamic of your project. Using a Cloud option may reduce the risk of meeting time and fiscal budgets since there is no hardware aspect of the project. It may reduce the risk of scope creep on your entire project since you will have everything precisely laid out in your host agreement. And because you are not buying new equipment, any change of direction will not result in a loss of large sunk hardware costs.

One type of risk needs to be singled out here—security. Since sensitive data or analyses may be stored in the Cloud, you’ll want to ensure that access to your data and your solution is completely secure and meets any compliance issues for your industry. Further, you’ll want to ensure you understand all of the strategic and tactical procedures developed by the host company impacting your solution—things like reliability, back up procedures, and downtime procedures. Again, you’ll want to ensure everything is laid out in the host agreement.

 

BIO business intelligence is available for both on-premises and Cloud solutions. Let us help you determine which will work best for you and get you up and running quickly. BIO will leverage your existing data for reporting and analysis to develop better insights into your business and increase your bottom line.

Join BIO for a free business intelligence webinar to get to see how BIO business intelligence software can help you meet your business intelligence and reporting needs. And please contact me at 203.705.4648 or by email at sandi@bio4analytics.com if you have any questions about BIO or business intelligence in general.

By Sandi Richards Forman of BIO Analytics Corp., Microsoft Dynamics Business Intelligence (BI) Solution Provider

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