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Cloud BI offers far more capacity, capabilities and features than its on-premises counterpart of the past. Organizations can use cloud BI to give a wider range of users self-service BI features that help them achieve insights and make decisions faster.

BI software remains a critical part of a modern organization's IT portfolio, even as the use of artificial intelligence and other analytics capabilities takes off. Cloud computing is influencing the sophistication and power of BI tools that vendors offer.

"You're pushing the power to the end user without having IT do the work and manage it," said Kevin Martelli, principal of technology at professional services firm KPMG.

The term cloud BI is a marketing label according to some analysts, but they and other experts agree that BI delivered as SaaS has significant advantages over on-premises BI software.

With cloud BI, IT teams that own and maintain the physical servers running the BI software have the cloud providers take over those tasks. The move to cloud BI also means that IT teams can offload implementing, maintaining and updating the software. This leaves them more time to focus on IT activities that provide critical value and help differentiate the organization from competitors.

Organizations can scale cloud BI up and down as needed without having to build -- and pay for -- the infrastructure required for peak capacity.

"If there's a huge demand for a BI tool at a particular time, the underlying infrastructure that has to be accordingly expanded isn't something the organization has to worry about. That's a performance or technical benefit," said Vinay Manne, partner at Guidehouse, which provides consulting services for management, technology and risk, including cloud and digital services.

This provides better value because the cost of cloud BI scales based on consumption. That can mean lower costs than running BI software on premises, where IT must maintain enough infrastructure to meet peak demand, even if that's infrequent.

Organizations often have multiple on-premises BI tools because different teams within the business prefer different products. That perpetuates the problem of data silos.

Cloud BI, on the other hand, can integrate with other systems and modern cloud data warehouses, so it's able to quickly ingest and process the different kinds of data. This removes the data silos and enables teams to fetch data from all the different systems the organization uses, said Vishal Gupta, vice president at the research firm Everest Group.

With on-premises BI, there were limitations around data and data literacy, and you needed IT to step in and create new models for people to build new dashboards. Kevin MartelliPrincipal of technology, KPMG

Early generations of on-premises BI tools required users to have technical skills, so technologists were typically the ones to run and build reports when needed by business units. But vendors that offer BI software as a service include more self-service features. This enables business users to analyze data, create reports and visualize information through dashboards on their own.

"With on-premises BI, there were limitations around data and data literacy, and you needed IT to step in and create new models for people to build new dashboards," Martelli said. "And although [second-generation] BI tools had more capabilities, they still sometimes required IT to help."

Cloud-based BI software continues to evolve with the goal of "getting the most amount of data to the most people in the quickest, easiest way without having to deal with IT for changes and integrations," Martelli said. "These BI platforms have become very decentralized and low-need for IT."

Organizations that adopt cloud BI can put more analytics capabilities into the hands of the business users who need to understand the data and generate insights to make decisions. Giving those capabilities to the right people accelerates decision-making, potentially in real time.

Thanks to the nature of cloud, SaaS-based BI delivers more capabilities and features, which makes it more user-friendly than the prior generation of on-premises BI tools.

Cloud BI tools allow for customized dashboard and data visualization; have interactive visualizations and storyboarding capabilities; feature easier integration with data sources; and offer traditional BI capabilities as well as an increasing amount of advanced analytics options.

Some organizations still use on-premises BI software, and experts note that they tend to do so because they're early in their overall cloud journeys. These organizations have yet to move their core transactional systems to the cloud, and those systems hold the data required for analysis on premises.

Others have adopted cloud BI, but are not making the most of what they have.

"Many companies do not fully appreciate the capabilities provided by the BI vendors," Martelli said.

Enterprise leaders can't assume their workers will optimize the use of BI software because they now have access to more capabilities and those capabilities are more user-friendly. They should continue to create a data literate culture that includes good data governance practices so insights from BI tools are accurate and trustworthy.

"At the end of the day, the objective is to use BI and analytics solutions to provide decision-support from an agile standpoint," Manne said.

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5 benefits cloud BI has over on-premises options - TechTarget