Q&A: More Changes Ahead in BI Landscape

Has the merger mania among data warehousing and business intelligence companies over the past few years strengthened the industry and the products it offers?

Has the merger mania among data warehousing and business intelligence companies over the past few years strengthened the industry and the products it offers? Not according to Dyke Hensen, chief marketing officer for PivotLink. Instead, he sees a loss of innovative spark with the recent rash of mergers, and customers left with more confusion than clarity.

Hensen and PivotLink -- which proudly calls itself “a David to the industry’s Goliaths” -- are big believers in software-as-a-service (SaaS), especially for today’s complex business intelligence needs. In this interview, Hensen explains why recent changes in the industry and the economy have made SaaS more timely than ever.

BI This Week: This is a time of rapid change in business intelligence and data analysis. You’ve been in the industry quite a while. What’s your perspective on what we’re seeing right now?

Dyke Hensen: In my opinion, the BI industry lost its innovative spark with the recent rash of mergers. The emphasis changed from innovation to integration. Even if customers didn’t want (or didn’t even own) any of the acquiring company’s technology, that was where a good portion of their maintenance dollars went -- and continue to be focused.

Gartner's Kurt Schlegel called this series of acquisitions a "tumultuous" event in the BI marketplace, and went on to say, "The consolidation in the market has not simplified vendor selection decisions; if anything, it has made them more complicated, because the acquisitions have thrown many existing product road maps into confusion.”

While this merger mania was going on, new vendors took the opportunity to innovate on emerging cloud platforms, invest in new database technologies, and create highly scalable and efficient “next-generation” BI platforms.

BI solutions have to continue to innovate to be relevant, since the fundamental drivers of BI haven’t slowed down. If anything, the need for better BI solutions continues to escalate. Organizations must process more information than ever before, and most are still struggling to understand and assimilate today’s information requirements, knowing that tomorrow’s requirements are at their doorstep. Combine this struggle with the pressures of the current economy and you have a situation that should prove to be the catalyst for even more change and innovation in the BI industry.

In particular, how is software-as-a-service and BI changing?

Different service models are emerging to support different needs for the enterprise. As I said earlier, the rate of data expansion has not slowed with the economy, and for the majority of organizations, competitive pressures are increasing every day. For all but the very largest multinationals, which can dedicate the resources and capital expense to build and maintain their own in-house solutions, I see few alternatives outside BI as a service model to meet these challenges. Even if the vendors gave their software away, SaaS technologies (especially BI tools) still offer better returns than on-premise systems simply by eliminating capital expense and dramatically reducing the internal requirements for development, support, and sustaining costs of the BI platform.

The other key benefit of a SaaS model is that it addresses critical transitory reporting requirements that may have a lifespan of less than two years. For instance, specialized progress reporting on critical integration measurements, or a merger or acquisition, or the rapid implementation of new compliance tracking -- some of these reporting requirements will go away or be incorporated into existing systems, but customers need them today. With the SaaS model, you can implement quickly without additional capital expenses and IT staff requirements.

As SaaS BI platforms mature and improve, these solutions offer a greater return on investment for customers and partners. For example, the software-as-a-service model allows the costs of sophisticated, massively scalable computing platforms to be shared among thousands of users; those users pay only for what they use; there is never a need to buy in advance to support future growth plans.

What kinds of concerns and questions are current and potential customers coming to you with right now?

It's not getting easier for anybody today. Budgets, especially capital investments in computing infrastructure, are being reduced or frozen. Legacy solutions have become more complex and require additional specialized IT skills to support things like mobile computing and cloud application data integration. CIO’s are being challenged to figure out how to run their BI infrastructures with less staff.

The basic question we are seeing today is: How does my organization meet increasing customer demands to expand our current user community yet not exceed the budget?

Concerning BI in general, how have user expectations changed regarding the user interface and training required to use the tools?

You needn’t look further than some of the best Internet sites to see real gains in simplified end user design. I didn't need instructions to book my last flight online and I didn't need instructions to find where I grew up with Google Earth. A simple, intuitive UI is the user’s expectation, regardless of whether you’re talking about an iPhone or a BI dashboard. Users expect self-service and self-proficiency.

The best designs take the complexity out of user interfaces. In our world, you will find more visual clues, interactive graphics, time-phased animation, and more real-time collaboration and annotation. I predict that complex and over-burdened user interfaces where you “click the right mouse button” to move about will go the way of the function key. The mobile device world will see to that.

Where does PivotLink fit in with all this change and innovation?

We want to be the force of change in the new world of business intelligence. The PivotLink team is made up of SaaS innovators and BI professionals who see the SaaS model as much more than a way to move old technology into a provisioned rack tucked away in some outsourced data center. Cloud computing done right is the platform for rapid innovation at a price point that really can make “bringing BI to the masses” more than just a tag line.

We believe that BI as a service is the answer for our customers to drive a more efficient operation -- and that it brings tremendous competitive advantage. We love being the David to the industry’s Goliaths.