When a tech vendor fails, rivals usually rejoice. Not in the nascent BI (business intelligence)-on-demand space, after well-funded startup LucidEra folded in June.
The company had raised almost $21 million in funding from high-profile venture capitalists. Though competitors immediately began wooing LucidEra's customers, they also felt compelled to put out public statements saying that its failure was an outlier, not the beginning of a trend.
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Not only have customers failed to adopt BI-on-demand the way they have other kinds of apps such as CRM (Salesforce.com, for example) or productivity ( Google Apps), but it has also received little validation from the big players.
IBM, for one, is only starting to "research" a Web version of its Cognos BI software.
"The data model differs from company to company, which is why you just can't put it into a multi-tenant environment," said Rob Ashe, general manager for IBM's BI and performance management division.
"I'd say we are of two minds. We like the benefits of the cloud, the elasticity and the way it scales," Ashe continued. "However, you also have to deal with the realities of security and moving a lot of data around."
While Sybase is launching on-demand versions of several apps, it doesn't yet see strong demand from enterprises for an on-demand version of its BI-focused database, Sybase IQ, says CTO Irfan Khan.
One independent analyst, Merv Adrian, says BI-on-demand remains too scary for most enterprises today. "A lot of companies are not willing to throw data in the cloud. Structurally there's no good reason to do it," Adrian said.
Also, BI providers "need to get ease of use right, and make it easy for data to get where it needs to be. You need to tease the value out quickly, otherwise, people are likely to abandon it," he said.
Brad Peters, co-founder of on-demand BI startup Birst says the value proposition for BI-as-a-service remains strong. "When you buy a piece of on-premise software, you have to spend $3-5 on services on top of every license dollar spent because it's still all on you to make it happen," Peters said.
Like BI-on-demand players such as Oco, Birst emphasizes how quick and easy it can be for many would-be customers to deploy. "We look just like Business Objects," Peters said.
And for those worried about Birst's stability in light of LucidEra's failure, he points out that the company's fifty-something customers include big financial services firms such as Royal Bank of Canada (RBC) and Securian.
Other BI vendors such as ParAccel are hedging their bets. "We have several customers that are on-demand application providers for whom we are the behind-the-scenes engine," said Barry Zane, CTO for the startup company.
However, ParAccel isn't looking to launch an on-demand version of its columnar database appliance, which is aimed at companies with data warehouses with capacities of more than 100TB.
"There's no way you can get the class of performance you need on a public cloud," Zane said. "You need big, predictable pipes to the servers -- that's where the cloud tends to be weak ... it's a gimmick more than reality if you need performance."
Forrester analyst Boris Evelson says BI-as-a-service remains a great tactical solution, especially for companies needing "something more Web 2.0 and collaborative than Excel." But he argues that would-be customers should go through a rigorous checklist first.
As per usual with enterprise software and services, departments and small-to-mid-sized companies are deploying BI-on-demand first, Adrian says.
He thinks enterprises will eventually catch on, though it will take time. "It's like open-source software adoption, it takes time for the tire-kickers to think it is safe enough," Adrian said.
This story, "Startups keep on-demand BI faith, but big vendors wait and see" was originally published by Computerworld.