BI applicationsBusiness intelligence (BI) applications have been moving steadily to the cloud for some time now. A new “2018 Cloud Computing and Business Intelligence Market Study” published by Dresner Advisory Services finds the number of organizations planning to increase spending on BI applications running on a public or private cloud to be roughly even at 36 and 37 percent, respectively.

But, there are nuances to how organizations want to consume those applications. The top three methods are try and buy, subscription, and as a managed service. All three rank equally in terms of overall importance.

When it comes to licensing BI software as a managed service, however, competition between vendors and third-party managed service providers appears to be heating up. The survey finds that while 40 percent of respondents have no preference, 37 percent prefer the managed service to be provided by the vendor. That compares to 23 percent favoring a third-party provider.

Not surprisingly, the survey also finds that organizations relying on a third-party vendor prefer the Amazon Web Services (AWS) cloud, which has a slight edge over Microsoft Azure platform, followed by Google Cloud Platform (GCP) and IBM Bluemix.

Vendor perspective on BI applications

In addition to surveying end users, the research firm also asked vendors many of the same questions. As a result, the survey finds that only 62 percent of vendors identified making BI applications available as a managed service as an important capability. Clearly, a significant percentage of the vendors favor a pure software-as-a-service (SaaS) model based on subscriptions.

Vendors participating in the survey also showed a marked preference for BI applications being hosted either on a private cloud or in a hybrid cloud environment. Some of that may reflect the cost of storing lots of data and the sensitivity of the data being stored. But, undoubtedly, control over what is quickly becoming a strategic asset for end customers is a factor in the age of digital business transformation.

Much of the data being collected in BI applications will eventually be used to inform advanced predictive analytics applications incorporating a variety of artificial intelligence (AI) models. Because of that opportunity, vendors such as Oracle are rushing to provide a series of “autonomous” cloud services based around a database platform in the cloud that it manages on behalf of customers.

MSP decisions

The issue that many MSPs will need to address is to what degree they want to resell managed services provided by a vendor rather than provide that service themselves. It’s much more profitable for an MSP to deliver BI cloud services themselves than it is to essentially act as an agent on behalf of a cloud application service provider. But the cost of providing BI cloud services can be significant.

The amount of data that needs to be managed creates a considerable the barrier to entry to providing a managed service around a cloud BI application. However, MSPs that provide that capability are likely to be viewed as more strategic than those merely reselling a service provided by a vendor. At the same time, a vendor will apply quite a bit of sales and marketing muscle to their own managed BI service.

Obviously, there’s a lot of at stake when it comes to managed BI services. MSPs thinking about offering these services need to make a strategic decision that will impact their business for years to come. There’s no absolute right answer. But, it’s also clear that not every vendor of BI applications will have the best interest of every MSP at heart going forward.

Ready Set Managed

Photo: Robsonphoto/Shutterstock.com

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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