Anybody who knows me knows that I am a big fan of Seth Godin. I find his logic enlightening, his insight well-reasoned, his writing innovative and when added together he is just cool!

(Pity I didn’t think of this way to see Seth cheap, like Victoria’s friend)

Seths blog Music Lessons (that work for publishing, too) reflects on the massive changes in business models that the record industry has undergone and on how the publishing industry is refusing to acknowledge it is undergoing a similar transformation.

The key insight is that the internet has introduced a new way for consumers to purchase music, movies and reading material (i.e digital downloads) and they prefer it to the old way of purchasing CD’s, DVD’s and printed books.

Alas the old masters of selling (or should we say controlling the sales of)  music, movies and publishing industries are reluctant to give the consumers what they want as it breaks their current business models.

Personally I agree with Seth that they will have to either innovate or die (now there is a business philosophy – Innovate or Die!).

So for me if I reflect on the massive change the internet is bringing to Business Intelligence I can see some similarities.  For this post im going to focus on the impact of Cloud computing.

Simply put cloud computing is when somebody provides you a hosted service for your infrastructure or software applications needs.

Compare cloud computing to the alternative of you having to purchase your own hardware, provision the hardware, install an operating system, configure your operating system, install your application software, configure your application software and finally maintain and support your application software.

We have just assisted a customer in implementing a Microsoft 2012 based BI platform (BI & DW) on the IaaS platform from one of the All of Government (AoG) providers.  We managed to standup new virtualised servers in under a day, compared to waiting for hardware to arrive (4-6 weeks), rack and stacking it etc.

There are lots of variations to the cloud idea.  Examples are:

  • Platform as a Service – PaaS
  • Infrastructure as a Service – IaaS
  • Software as a Service – SaaS
  • Private Clouds
  • Public Clouds etc

To me there is a big difference between providing core infrastructure/software where the customer has to own the licenses for the software direct with the software’s maker/owner and providing a multi tenanted environment where the customer pays a subscription to use the software when they require it.

At the moment the incumbent BI software providers are a bit like those old masters of book and music sales.  They are worried about cannibalising their (very) successful licensing models, so are reluctant to provide any subscription based multi tenanted models.  And to be fair they havent yet seen any credible threats like the music industry has.

You can just download the software for free for a lot of them (hell Microstrategy even encourage you to use their software for free).  But the install is still something that requires a lot of time and effort (unlike downloading a mp3 or a epub these days).

But as it was when Napster and then Apple (same model one just had permission) enabled easy access to music, the days of easy access to BI via SaaS type offerings is coming.

The question is will it be delivered by startups with cool new BI capabilities and visualisations or by the current BI software leaders? (Gartner Magic Quadrant here if you don’t know who they are)

My view is a few startups will appear and make some noise and the big boys will then buy them or accelerate their own capabilities and offerings.

This is because there is a big difference between the old Book/Music model and the BI model.

The book/music guys didn’t have the infrastructure or appetite to launch the platforms to enable digital download until it was too late.

The big BI vendors do.  The likes of Oracle, SAP. SAS, Microsoft all have hosting capabilities (or can easily partner with the likes of Amazon or RackSpace who do it better and cheaper) which means the only barrier to the new BI business model is a change in licensing model (refer to point about cannibalisation of licenses).

But will they deal with that?

Well a few months ago (when I started drafting this blog post) I would have said no.

But after one of our guys attending the Oracle User Conference in Wellington and hearing from Amazon about their hosted Oracle Database offering, im now thinking that maybe some of the big boys will react in time to still be around in the new BI world.

Check out these prices for a hosted Oracle 11g DB.  I reckon this is way cheaper than what you would pay just buying the licenses direct from Oracle!