I was just listening to an interview from last week’s SAP’s Sapphire user conference where SAP’s Co-CEO, Bill McDermott reported that SAP’s cloud business grew by 380% in Q1.  He didn’t break it down, but one can reasonably assume that the bulk of this growth occurred in business applications like core ERP, SCM, SFM, HCM solutions.  It got me thinking about where we are with Analytics in the cloud.  A report published last fall by noted BI analyst Howard Dresner tells how adoption of analytics in the cloud is still in the early innings.  This makes sense.  As business applications move to the cloud, more businesses get familiar and comfortable with this new computing model.  Perhaps more importantly, it puts business data—the lifeblood of analytics—out in the cloud making the move to cloud BI a natural next step. 

A recent Aberdeen white paper, Software-as-a-Service Helps Deliver Satisfied Analytics Users illuminates the positive results adopters of cloud BI are realizing.  They experience superior results as compared to companies that deploy BI on-premise.  Users are more satisfied with the available tools, enjoy less data latency, and are more likely to have in-house BI training. In addition, they have strong analytic knowledge within the business functions, and probably the most impactful outcome, their BI projects are driven by the business, not IT. 

This is all good stuff, but it got me thinking as to why this is the case.  We have to be careful not to confuse correlation with causality.  Is it the implementation of SaaS BI that delivers these results, or perhaps the companies that make the choice to deploy a cloud-based analytic solution bring these superior traits and approach to their BI projects to the table?  My suspicion is that it is driven more by the latter.  I believe that these high-performing organizations are so convinced of the value of fact-based decision making and the analytics that enables it, that they are self-selecting into the SaaS BI cohort.  These are the companies that understand the potential value and find a new, more cost effective way to make it happen.  Clearly the deployment of a SaaS BI solution gets them there faster, cheaper, and with less risk.  What do you think?  Read the paper here, and weigh in with a comment.