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Stay competitive with Software as a Service business intelligence services

Big and bulky business intelligence systems are being delivered directly to customers as Software as a Service (SaaS), making customers' shops more agile but also changing the playing field for value-added resellers (VARs). To stay competitive, VARs need to change their SaaS business intelligence strategy.

Service provider takeaway: Customers have adopted Software as a Service-based business intelligence solutions to provide real-time data analytics. Value-added resellers (VARs) can provide services to help customers select, customize and manage this new generation of business intelligence systems.

The demand for business intelligence (BI) solutions has escalated -- as evidenced over the past year by industry heavyweights' acquisition of various BI software companies. This escalation is good news for VARs that make money in business intelligence services. At the same time, though, Software as a Service (SaaS) has crept into BI territory, changing dynamics for these VARs and obscuring their path to profitability. But rather than deciding to exit the BI market, smart resellers can change their strategy and continue to generate revenue from business intelligence services.

Before we explain how VARs can shift strategy, let's briefly review the history of traditional business intelligence systems: The legacy business intelligence software of established vendors was designed to run in traditional corporate environments. These conventional solutions typically require significant up-front investment, customization and ongoing support to meet a company's objectives. Further they're not readily accessible to remote workers or responsive to changing requirements.

As globalization and e-commerce have escalated competition and as product commoditization has eroded customer loyalty, corporate executives have sought new ways to collect and analyze corporate information to make better business decisions. Meanwhile, changing work habits and a more dispersed, mobile workforce have forced companies to find new ways to enable employees to access and disseminate data quickly and easily from any location at any time.

Coupled with the need for real-time data to enable businesses to be more agile, these conditions have driven many companies to explore SaaS BI solutions. Today's SaaS BI solutions are designed for rapid deployment and direct delivery over the Web. And most companies don't need to make significant up-front investments in software licenses, hardware platforms and consulting services to implement today's Software as a Service BI solutions. Instead, they can adopt these solutions on an incremental, pay-as-you-go basis.

A new role for VARs

Because of the direct-delivery and low-implementation hurdles of SaaS, some VARs worry about being "disintermediated" from the market. But the range of SaaS BI solutions has expanded rapidly, and these solutions still need proper configuration for maximum benefit in most business environments. Thus VARs can still play an important role by helping customers select, integrate and use SaaS BI solutions. In essence, SaaS-based BI doesn't represent the end of the line for business intelligence VARs, but rather the end of an era in which VARs could depend on long, high-priced engagements that helped customers deploy complex BI systems.

There are more than 25 Software as a Service providers of Web-based business intelligence solutions listed on  Thinkstrategies' SaaS Showplace Web site.

A prominent example of such SaaS business intelligence providers is LucidEra, which has developed an easy-to-use, on-demand solution that can address many companies' business analysis needs in a flexible, pay-as-you-go fashion.

LucidEra's multi-tenant and modular SaaS solution includes a revenue-cycle-analysis capability that links data from customer relationship management (CRM) and financial applications. LucidEra's sales analysis capabilities allow managers to analyze historical sales data, forecast future sales, and aggregate quotas and commissions quickly.

While LucidEra's solutions are relatively simple compared with legacy BI systems, many customers still need help properly implementing and integrating these solutions into their corporate operations. VARs can help these customers connect LucidEra's technologies to the right data sources within their existing database systems, configure LucidEra's solutions to generate the right reports to meet customers' needs and train end users to fully exploit LucidEra's features.

Working with a SaaS BI solution provider such as LucidEra presents a discrete set of challenges, but VARs can still build a service package that links legacy applications. Many Software as a Service solutions include application program interfaces and Web services to interoperate with legacy applications and one another, but VARs still have an opportunity to help companies integrate and migrate their SaaS BI solutions to legacy applications and data sources.

While Software as a Service will fundamentally change the software industry and the economics of VARs, value-added resellers have a role to play as trusted third parties that provide customers with proper Software as a Service business intelligence services to meet their corporate objectives.

About the author
Jeffrey Kaplan is the managing director of  Thinkstrategies , a strategic consulting company based in Wellesley, Mass., and the founder of the  SaaS Showplace, a vendor-independent online directory of SaaS solutions and best-practice information.


This was last published in January 2008

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