Gartner: SaaS-based BI gains traction

Traditional on-site business intelligence appears to be losing some traction in the face of SaaS-based alternatives, according to a survey by Gartner. A third of the 1,364 IT managers polled reported plans to use a SaaS-based BI offering. The number who have already swapped out their existing on-premise product with SaaS or plan to soon was 17 percent.

"That means a lot of potential upside for the aforementioned new-look SaaS providers (although it should be noted that Birst went from a SaaS-only model to offering both SaaS and on-premises options)," writes Barb Darrow in a post at GigaOM. "Still, the momentum for SaaS is strong. Valuations of SaaS-oriented software companies are off the charts compared to their traditionalist rivals more rooted in the on-premise software world."

The lure of a SaaS BI solutions is too much to resist for a lot of businesses that are fed up with the cost, upgrade procedures, implementation challenges and infrastructure requirements of on-premise offerings, Darrow reports. SaaS holds out the promise of faster, cheaper business intelligence--even though this is yet to be verified. "Buyers often think that SaaS is cheaper, but the reality is that this is unproven," Gartner said.

Gartner found that SaaS may save money over an on-premise solution during the first five years but not after that. In the long term, the savings would come from a decrease in IT support expenses.

"Still, as long as there are savings from SaaS, even if they come from reduced personnel costs, it's likely corporate IT dollars will continue to flow to this model," Darrow writes.

For more:
- see Barb Darrow's post at GigaOM

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