Dr. Mukund Deshpande - senior architect, Business Intelligence Competency Center, Persistent Systems in conversation with V. Sudhakshina of CyberMedia News talks about the advantages and disadvantages as well as relevance of BI over cloud trend.

BI on cloud - can you explain this latest phenomenon and the trend you see in this pace in India?

The main reason why cloud is getting a lot of traction is that it offers a service, which customers can consume in pay-as-you-grow model. It gives you a billing model which is Opex centric and eases the burden of initial investments.

Traditionally BI deployments required investments in supporting IT infrastructures such as servers, storage, OS licenses and the like. Cloud operations are very successful where there is nothing critical, such as mail server. They are an important function but don't act as a differentiator for the industry.

In India BI on cloud has not yet gained traction, because of its highly critical nature. The main disadvantage for the BI over cloud is the nature of data you are dealing with is very sensitive. There are very less chances where the organization would be comfortable letting the data move out to a cloud infrastructure where it would be managed by a third party. Thus, shifting or data processing on cloud becomes sort of a hurdle or issue for cloud and BI.

Second problem is the huge amount of data that needs to be processed over the Internet. For example the retail sector, where there is a lot of data processing happening, it would be a challenge or serve as a bottle-neck to suddenly move this humongous amount of data to the cloud. These are the two sort of primary issues that we need to overcome.

In the advantages side, BI on cloud is actually a great way to do. One hurdle which the vendors always face when they typically go and sell is ROI and it becomes tough when there is a Capex model involved right from the beginning. This becomes a solution when you move to cloud as there is no high Capex required at the beginning. The money which you have to invest becomes very small and one can try to get the value and decide without bothering. ROI proposition becomes very attractive.

Another challenge faced by BI is making it pervasive or making it accessible. This thing again can be overcome if we do it from the Web, because everybody has access on the Web. That way it becomes easier in getting access to everybody. These two are a big win for this trend.

How are you seeing BI adoption by SMBs in India?

The BI adoption by SMB is not very encouraging and is pertained to only a particular critical processes and not in a wider manner. For example raw material is a very important process then only for that part of process BI is deployed.

Traditionally the SMB market is been very cost sensitive and ROI sensitive. They sort of have a little chaotic growth path and have lot of different systems and different ways of gathering data. The investments are pretty low and also there is a very complicated way of how the transactions are captured in the data.

However, from the business point of view, this is the market where there is competition and pressure to improve their operations expense and this is where BI can play a significant role. All the major players like Cognos, Business Objects are very confident about BI adoption in the small segments, so obviously we can see a lot of opportunity.

There are many companies that are coming with a lot of cheaper options. Most of the major players are creating solutions just to target the SMBs. These vendors understand the importance of this market and are coming up with a lot of lower-end offerings. SMB can initially leverage these cheaper options and once they are comfortable they can go for the larger ones and then they would see the value out of it.

What is the opportunity for BI over the cloud for SMBs?

There has been little or no BI investment in the SMB space. Hence, cloud becomes a very attractive proposition with its benefits on ROI. You can start small with less initial running cost and have high level of control and see the benefits as you grow. I see a lot of promise for the SMB sector.

If they wanted to do BI only for one business process, with this trend they can do it for more. I would say that BI over cloud in India has high opportunity than in the US. A new technology is easier to penetrate in the new market than in the existing ones and the same is the case for BI on cloud as well.

The vendors need to work aggressively on pushing this trend. They need to clear the hurdles in terms of infrastructure, security, and reliability.