Using Open Source Business Intelligence Tools

Wednesday, February 09, 2011

Rahul Neel Mani

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Open Source BI tools can be teamed up with proprietary tools to reduce TCO. In an interview Mark Madsen, CEO, Third Nature, tells us how.

Q: What, according to you, are the most noteworthy downsides of adopting proprietary/standards-based Business Intelligence (BI) solutions from the large software companies?

A: There are two downsides to the large enterprise BI vendors' products. The first is cost. The second is complexity. On average, an enterprise BI product costs $1500 per user in the U.S. There are packages that reduce this cost for small deployments, but the price jumps up if you increase the size of the deployment. This inhibits broad use of the products in the organization because the license cost doesn't scale well to the size of the organization.

The products are also very complex, for both operations and end users. Most of the enterprise BI products are suites with many components. To manage the environment and the models in the BI tool takes an administrator with a high degree of technical knowledge. The challenge for end users is the level of understanding needed to get information. The tools were designed during a period when usability was less important than query features. The vendors today are competing mostly on the number of features rather than whether people can use the tools, much like the spreadsheet wars of the 1980s when Microsoft and Lotus constantly added features until nobody could use their spreadsheets.

Q: Vendors mostly concentrate on selling products or tools that can be used to build BI solutions but rarely concentrate on the problem the customer is trying to solve...given this scenario, do you think corporations will still go in for proprietary BI solution?

A: I agree with you on the goal of the vendors, but they do recognize that they have to sell what customers need. Their problem now is a monolithic software environment. This forces them to serve the most common needs while at the same time providing features for expert users in the same product. They also have a problem with organizational size: they are so large that many of the product engineers and managers never see how the product is used and under what circumstances.

I don't believe this changes how corporations adopt open source or proprietary BI. It creates an opportunity for smaller, more nimble BI vendors to take some of the BI use away from the big vendors. Open source vendors are a part of this, but not the only part.

Q: The general sentiment is that off-the-shelf BI tools are costly, complex and fall significantly short of enabling enterprises to achieve the sought-after benefits in efficiency and effectiveness. How can this gap be addressed by the Open Source BI software/tools.

A: Open source BI tools do not have the same richness of features that the large BI tools have. There is a downside to this gap because many people have a need for those more advanced features. The good is that the open source products are less complex to configure and use for basic purposes.

I don't see many people replacing their proprietary tools with open source. I see them using open source BI tools for the more common uses because it meets the need at a lower cost. The other area I see open source used more often is for embedding BI features into applications like customer self-service portals and call center systems. It is easier to integrate an open source product directly into an application than it is with a proprietary BI tool, as well as being cheaper when you consider the large user population of such an application.

Q: What key features will you attribute to Open Source BI tools which are absolutely missing from the traditional options available in the market?

A: I believe the open source tools lag behind the traditional vendors when features are compared. There are some exceptions. Some of the dashboard software and visualization components are superior. The ability to integrate and embed into applications is superior. The real question is how many of the more advanced features in the proprietary tools are used often enough to justify the expense.

Q: Vendors can give support and that is a big draw for the users. Are open source BI tools trustworthy and will there be support available?

A: Support is available for all the major open source projects. The most widely-used products are from commercial open source vendors, meaning they provide both open and closed source versions of their product. If you use the entirely free open source software then you rely on the community of developers or a third party consultancy for support. If you purchase a support contract then you are essentially buying the commercial open source version of the software. There are differences in the software. The commercial version usually has more enterprise level features like multiple developer support, high availability options and single-sign-on integration. The level of feature difference between the open and closed versions varies from vendor to vendor, as does the size and quality of community.

Q: What advantage can a user company get by using Open Source BI tools when we talk about “total cost of ownership”, “customization” and “better analytics”?

A: I find that the TCO varies based on the size of the environment. There are some attractive pricing options from the big vendors available if you are deploying to a small number of users, generally less than 25. I find that the small cost difference at this level can sometimes favors the proprietary vendors. However, an unsupported free open source version will still have the lowest TCO at this level. The medium to large deployment TCO favors open source tools because the per-user cost is much lower.

The labor side is not largely different between vendors of any type. What I've found is that open source BI tools are on par to slightly better than Microsoft BI when it comes to labor costs. Both open source and Microsoft BI development environments require more labor than the big BI players. In general, this raises the initial development costs but doesn't have as much of an effect on long-term labor costs. I have not seen significant differences in the size of BI staff between open source and proprietary implementations of the same scope.

Q: What trends do you see toward greater adoption of Open Source BI tools vis-a-vis solutions from the large vendors such as IBM, Oracle, SAS, Sybase?

A: I expect to see continued growth, but the open source vendors are still trying to make money like other software vendors. They will face increased scrutiny of their features and the difference in both cost and time to deliver a satisfactory solution. This is likely to slow the adoption rate.

Open source is growing faster than the large vendors today, but at about the same rate as many of the new BI vendors in the market. It's hard to measure the true adoption rate because only the paid support side of open source BI can be counted easily. The many users of the free versions of the software are largely uncounted.

Cross-posted from CTO Forum

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