Profit on demand

As new cost-cutting drives converge with a growing thirst for decision-supporting information - served on demand at the point of need - a lucrative new opportunity is ripening for the ISV, SaaS and integrator channel.

As new cost-cutting drives converge with a growing thirst for decision-supporting information - served on demand at the point of need - a lucrative new opportunity is ripening for the ISV, SaaS and integrator channel. By enriching existing solutions through the addition of open source business intelligence capabilities, forward-looking channel players could soon have the market sewn up, says David Armstrong, VP OEM at Actuate.

As another new year dawns, the IT industry analysts have been typically busy, making bold predictions about what's ahead. Amid the obvious - an explosion in cloud computing, software as a service, mobile apps and the fallout of heavy cost-cutting - there are a couple of unexpected gems that signal rich pickings for the independent developer and service provider community. Add one to the other, and the opportunity grows richer still.

The cause for excitement is the convergence of a widespread thirst for filtered real-time information with the entry of 'open source' software into the mainstream. To the canny ISV or SaaS provider, this happy collision signals a wealth of new business opportunity - and at appealingly low risk.

Information on demand
Consider first the surge in demand for 'information as a service'. A recent blog posting by Noel Yuhanna, a principal analyst at Forrester Research (Strong Growth and innovation for Information-as-a-Service in 2011, November 2010), highlights an accelerating demand for easily accessible and reliably consolidated information to support decision-making.

Whatever an organisation's current strategic goals, timely decisions are paramount - yet the more pressure there is on core staff's time, and the more dispersed the source data, the harder it is for key individuals to measure performance, spot good or bad trends, or take positive, decisive action.

Any direct-selling software developer or third-party solution provider can tap into this need, by adding an information consolidation and reporting facility into their existing portfolio of products or services. Forrester's Yuhanna predicts strong growth in solutions which consolidate and serve up filtered, decision-supporting information in 'near real time' at the point of need - "to support new business requirements such as self-service customer portals, real-time BI, and single-version-of-the-truth". He includes the need to extend on-demand information 'services' to mobile users, and notes that the diversity of information sources will multiply rather than reduce.

All of this represents a huge opportunity for the ISV, SaaS and system integrator channels, given that they have the clearest line of sight to the often highly individual needs of customer organisations. These varying requirements might be determined by size (number of users, diversity of locations) or by vertical market focus (the particular pressures on the financial services sector versus those affecting healthcare, for example).

Open source = low risk
The challenge for the channel is to expand their existing solutions and services so that they corner the opportunity, but in such a way that does not over-extend their capabilities and resources, upsetting their commercial models or creating new risk.

This is where open source comes in. While open source is hardly new, its acceptance in the mainstream business world has been a long time coming. The day has now arrived, however, and its relevance to many pressing business problems is propelling it to the top of many companies' IT agendas.

By decoupling pure functionality and potential from a particular vendor, an open source approach offers the ISV, SaaS and independent integrator community an unprecedented opportunity to serve up flexible, affordable business intelligence capabilities as a simple yet highly significant extension to their standard portfolio.

Ecosystem efficiencies
By harnessing an open source strategy, channel players can form new partnerships easily and at low risk, supplementing their own skills with complementary functionality and features that already exist elsewhere in the market. Instead of having to develop data interrogation and reporting capabilities from scratch, they can simply bolt compatible open third-party solutions on to their existing products, without worrying about incompatibility.

It is no coincidence that the respected open source business intelligence reporting environment, BIRT, recently passed the 10 million download mark. These volumes reflect growing momentum among SaaS providers and ISVs embedding the solution into their own applications, introducing a highly customisable, visually-rich data analysis and reporting environment to their products and thereby adding new value for their customers.

These partners immediately see the benefits of BIRT functionality for free, via the open source programme, whilst having the confidence that they are well positioned for growth through the commercial extension of the solution, complete with support services. It isn't only small independent solution providers doing this, either. Some of the biggest names in IT, from Computer Associates to Cisco and Siemens, are turning to proven third-party BI solutions to give their customers the reporting functionality they so badly need, yet without the risk of distraction from their core skills and experience.

Where software has been developed based on an open source strategy, developers can try out the capabilities for free; if the source is credible, there will be an option to purchase a fuller commercial version of the technology with training and support at a later date.

Raising the bar
Faced with an increasingly competitive marketplace and a higher level of customer frustration with unwieldy or non-intuitive business intelligence and reporting solutions, open source 'OEM' partnerships present an attractive proposition for independent software providers seeking new ways to differentiate their products and expand their markets.

By contrast, developing, supporting and maintaining home-grown business intelligence capabilities would be unrealistic from a cost and time-to-market perspective, particularly if the ISV's skills lie in other areas. At the same time, however, standard off-the-shelf solutions rarely deliver the flexibility customers demand.

The third option - partnering with an open source BI specialist - gives channel partners access to rich, customisable and easy-to-integrate functionality that offers their customers maximum flexibility, without exposing the business to new risk.

Turning points always indicate new opportunities for the channel, whether the trends giving rise to them are seemingly positive or negative. As customer organisations cut back, they need new efficiencies; as they prepare for new growth, they seek innovation and competitive edge. The common facilitator is, of course, IT - provided the economics are right and the ROI strong, quick and measurable.

Decision-supporting information is what most organisations crave right now, and the associated returns of sharper decision-making are well understood. The only remaining question is who will cash in? Open source BI hints strongly at the answer, paving the way for the channel to clean up.

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