Analytics Advance Through the Cloud
Like many other CRM applications, analytics is moving to the cloud, much to the benefit of the businesses that have adopted such solutions, according to a pair of reports released this past summer.
The emerging analytics-as-a-service market includes specific solutions for customer service, marketing, sales, Web, social media, financial, and other needs, according to MarketsandMarkets. The research firm values the market at $4.23 billion currently, but says it is poised to soar to $23 billion by 2020.
Key growth drivers, the firm found, are the lower total cost of ownership and the increased agility and scalability that such solutions provide. "As analytics-as-a-service eliminates the need to implement and manage analytics infrastructure on premises, it helps organizations cut preventable losses, generate more revenue by increasing operational efficiency, and create new opportunities," the firm stated in its market forecast report. "These factors have resulted in an increasing demand for analytics-as-a-service to analyze critical business situations on demand as soon as they occur."
The report notes that businesses of all sizes are increasing their adoption of cloud-based analytics from vendors such as SAS Institute, IBM, Oracle, Computer Sciences Corp., and Hewlett Packard.
Nucleus Research adds vendors such as Domo, Adaptive, GoodData, Pentaho, Tableau, Salesforce.com, Qlik, and Yellowfin to that list. The firm also notes that barriers to entry in the analytics-as-a-service market have been lowered, resulting in the segment becoming "more crowded."
Even Accenture joined in, following its July launch of advanced analytics applications that can be run on their own or through the Accenture Insights Platform. The Accenture Insights Platform is an end-to-end analytics-as-a-service solution comprised of an integrated suite of technologies, consumption-based commercial arrangements, and enterprise support.
The industry has become more competitive as well. "Moving forward, stand-alone analytics vendors will have to differentiate themselves with either industry-specific solutions, which deliver a 57 percent faster time to value, or more advanced analytics functionality," says Anne Moxie, an analyst at Nucleus Research and one of the report’s authors.
When they adopt these solutions on the sales side, businesses stand to shorten the sales cycle by an average of 8 percent to 14 percent, according to the report from Nucleus Research. The firm says that increased data accessibility, mobility, and easier integration with applications such as CRM were the key enablers of these results.
"Interactive capabilities, such as drill-down and self-service drag-and-drop graphing, also provide added value that helps sales find more detailed information and specific relations between variables," Nucleus's report states.
But the benefits go well beyond the sales department. "Management can benefit from analytics to provide better coaching, identify bottlenecks, build reports faster, and more easily create visual presentations. Marketing can use analytics to determine what campaigns are most successful, allowing them to better predict and plan the reception of future campaigns. Operations benefit from the best allocation of resources," Moxie says.
"The most successful cloud analytics deployments resulted from accessibility for a larger number of employees. On average, on-premises analytics deployments have 76 users, and cloud analytics deployments have 249 users. This indicates that access to insights can help improve decision-making at every level," she adds.
Cloud analytics vendors deliver a 2.3 times higher ROI than on-premises analytics vendors, Moxie points out. "This is driven by cloud vendors that offer enterprise licenses instead of per-user fees, allowing for a higher level of accessibility."
But that also comes with a strong warning: "Since cloud solutions are accessible to a higher number of users, adoption becomes more important and can be more difficult," Moxie says.
She urges companies to do their homework, first identifying how each user can achieve value and then carefully weighing all the options, because solutions with "out-of-the-box capabilities" may or may not be able to address all of the pain points that are specific to particular industries or user types.