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July 24, 2012

Predicting the Next Cloud Boom

Robert Gelber

The confluence of highly available cloud services and a growing business analytics market has at least one researcher predicting a new tech boom. Forbes contributor Joe McKendrick suggested that cloud providers have a potential to drive the analytics industry to “a whole new level” in an article last week. He pointed to a report from Saugatuck Technology, which laid out a number of tea leaves.

The strategic management report, Redefining Business Intelligence, Analytics, the Cloud, and the Future, encompassed research performed through global surveys and interviews with enterprise business and IT leaders. The company also held briefings with providers and developers of business intelligence, analytics and cloud services.

Despite the popularity of cloud and business analytics technologies, the report found that just 13 percent of enterprises worldwide had deployed and actively used cloud-based, business intelligence and analytics solutions. This figure was consistent regardless of industry, or company size.

One glaring indicator of fast change comes from a sample of 200 enterprise IT professionals, business leaders and roughly 30 vendors. The data suggest that cloud-based business intelligence and analytics will see an annual growth rate of 84 percent over the next two years. This level of proliferation far surpasses standard economic growth.

The report’s authors see cite three main factors behind the strong interest in these technologies:

  • Economic uncertainty.
  • Business leaders searching for low-risk, high-reward improvements.
  • IT leaders looking to scale quickly while remaining cost-effective.

McKendrick explained that companies continue to spend on business intelligence because leaders want clarity. If data can help predict outcomes, the investment eventually pays for itself.

The technology is not a complete winner, though. It was noted that fully-implemented in-house deployments of business analytics or intelligence solutions have proven cumbersome, difficult and expensive. In some cases, only a small number of analysts and executives can leverage these tools.

Cloud services are being looked at as a possible solution to these current woes. For example, they have the ability to assemble the variety of required analytics components, networking and storage. The technology can also manage data, and perform extract, transform and load (ETL) operations.

The same paradigm applies to big data applications as well. Instead of constantly upgrading storage infrastructures, enterprises have the ability to migrate their data to a cloud provider. Not only does this mitigate future capacity issues, it reduces the need for companies to find highly sought-after data professionals.

Still, if there’s one major sticking point, it’s security, notes the report. While it’s true this concern still keeps some would-be adopters at bay, cloud providers say they are working hard to incorporate the latest security protocols and compliance standards.

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