For a couple of years now, there has been a substantial amount of hype in the business intelligence (BI) space regarding “cloud BI,” or business intelligence systems hosted by Internet “cloud computing” service providers. This “cloud BI”, which is actually SaaS (software-as-a-service) BI, has been riding the wave of cloud computing in general, with the lower startup costs, faster deployment and easier scalability that cloud-based software implementations promise business customers.

Several new companies have emerged and are promoting a new golden age of BI which they say will be faster, easier and cheaper than conventional business intelligence.

While this sounds fantastic at first glance, it might be a good idea to look beyond the hype to determine if deploying a BI solution in the cloud offers the same types of advantages of other SaaS solutions, such as CRM, accounting and email.

Does SaaS BI compromise your data security?
There are two unrelated issues to think about here.

First, the growing list of high-profile data breaches should give anyone pause to consider what might happen when sensitive corporate data is at risk of exposure to unauthorized third parties, whether external hackers or employees of the cloud BI company (or their infrastructure providers). Besides the business risks which could be caused by exposure of your data, there may also be legal repercussions of certain types of regulated data being exposed. Even if the cloud provider is at fault, ultimate legal responsibility always lies with the owner of the data.

The second issue relates to the intellectual property contained within your company’s BI system. Serious BI solutions always involve customized and particular application of BI technology to answer certain business questions and analyze data in creative new ways. Advanced BI users build a lot of their decision-making strategy into the queries, reports and dashboards they utilize. For example, which key performance indicators (KPIs) are tracked and how can be a big part of the “secret sauce” of a company’s management approach. Sharing this critical source of competitive advantage with a cloud BI vendor, which profits from offering more effective BI solutions to hundreds or thousands of customers, is taking a big risk. How would you feel if your innovative approach to data analysis and decision-making suddenly appears in the next version of the BI product available to your competitors? BI gives business strategy a tangible form – something that you should do your best to protect without compromise.

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