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February 08, 2011

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Sam Horton

In the F500, Controllership (Finance) was delegated the task of monitoring compliance and updates worldwide on behalf of purchasing, where the purchasing function reported to IT. That works because in many cases compliance is so complicated that it is itself an analytic task. (Why: Costs are allocated out by group utilization, so someone must consolidate it) As an OEM, the task fell to the commercial team and the vendor (Microstategy) was very helpful. In both cases, we had internal BI reports on license compliance a remittances for CIO/IBU review and budgeting.

Lisa Pappas

Cindi, do you think SaaS deployments are a viale solution to the server- and user-based licensing challenges? It does provide a utility pricing model -- Pay for what you are actually using. Or, in practice, is it just as difficult to measure ROI with an SaaS approach versus on-premises solution? Please share your thoughts.

Cindi Howson

Hi, Lisa, Good question. I do think SaaS and in general subscription-based pricing is both sometimes more straight forward for customers to manage but also more usage based. It's a funny thing, because when SAS first introduced its BI solution several years ago, I said that I liked the subscription pricing model. Dr. Goodnight, never to mince words, said I couldn't be a real analyst then as he had never met an analyst who liked SAS' model! What I liked then and now about subscription pricing is that it also forces the vendor to stay focused on satisfying the customer; if not, the contract is not renewed. On the down side, it means some companies can't capitalize their software and certainly the longer-term costs need to be weighed of subscription versus up-front acquisition.
Regards,
Cindi

Norm Walters

Buyer beware is right! I'm working on a project right now that uses one of the large BI vendors, and the cost of licenses has become a serious issue as we try to expand to thousands of users. So much so that we're evaluating other tools, such as open source ones, to find something that will meet the needs much more cost effectively. I suspect this particular vendor is going to lose a lot of revenue in the near future from this client!

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