Cloud vs. On-Premise Business Intelligence: 10 Research Questions to Help Your Decision-Making
Last updated on
December 9, 2022
Your solution for data mining, analysis, and access will likely have a direct impact across your organisation, affecting spending, speed of operations, workflows, and strategy.
Organisations increasingly generate a massive amount of data, so there’s growing scope for gaining a competitive advantage by making better use of that resource - but also greater scope for getting it wrong.
So your decision-making process on cloud or on-premise business intelligence (BI) must attempt to simplify what is a complex beast. Some of the questions you’ll need to explore if you’re to successfully navigate the issues surrounding data analytics solutions include:
- What’s your current capacity to handle a growing stream of database queries?
- Do you have the infrastructure in place for on-premise BI?
- What’s the real cost of cloud BI?
- Are your hands tied by data protection regulations?
So to better weigh the pros and cons, read on as we compare on-premise and cloud BI.
Table of Contents
On-premise vs. cloud Business Intelligence: pros and cons
Let’s jump right in and look at the main issues you’ll be confronted with when comparing on-premise/self-hosted BI with cloud/SaaS BI:
The technology simply isn’t there for massive data transfers to and from the cloud at speed, which is why companies that generate big data volumes generally prefer either a faster, in-house solution, or a cloud solution like Trevor.io that doesn’t copy your data.
Also, if there’s a remote server issue or another emergency that suddenly affects uptime, you don’t have control over a third party’s urgency to fix it - if it’s on-premise, though, you can make sure it’s prioritised.
Highly regulated industries, like finance and healthcare, have to be very wary about managing their data in the cloud because of the restrictions in place on handing over sensitive data to a third party.
This may come down to what region you're operating in. For example, EU regulations are very strict, making compliance a big hurdle for a cloud solution - which is why on-premise or self-hosted BI is the natural option for companies that manage sensitive data.
As for concerns over the security infrastructure of on-premise solutions, the best tools - whether cloud or otherwise - have multiple layers of protection in place.
Speed of setup
Cloud BI is typically faster to set up than on-promise solutions as there is already a pre-existing infrastructure in place with no manual setup required. This also means low upfront costs, which we discuss next.
If you’re a small start-up and don’t already have a tech department, it’s cheaper to set up a BI network in the cloud. But there are extra costs to cloud BI that can quickly kick in and take over what you’ve gained in low maintenance, especially for a fast-growing business.
One of these is the cost of additional users, and another is data transport.
As mentioned above, transferring massive volumes of data to and from the cloud is not an efficient process - how could it be if you’re moving data to someone else’s hardware and then back again? And as your data requirements increase, so will your need for extra internet bandwidth, which you’ll have to pay for.
However, if you already have an IT team and server with space on it, your only need is to install the analytics software - the hardware is yours, and you won’t be incurring extra charges over time for additional users.
The question of support really is a tool-specific one. If your data analytics are in the cloud, your level of support will be part of your service agreement, which will vary according to your provider and plan.
With on-premise BI, your in-house IT team will manage local matters, like software installation and server capacity, and additional support comes down to what’s offered by your BI software company.
Trevor.io has a highly responsive, world-class support team you can contact by live chat, phone, or Zoom - and you can even drop by in person if you happen to be in the area - but other on-premise solutions can’t always match that!
Now let’s move on to some of the other questions you should be asking yourself before deciding on your best business intelligence solution.
1. What’s the difference between self-hosted and open-source BI?
Self-hosted BI is where the BI software is downloaded onto your business’s own servers, either on-premise or in the cloud.
Open-source platforms offer a particular kind of self-hosted BI service where there’s theoretically no cost for the software itself, instead, the documentation and code is provided by contributors, and you have the option of contracting additional technical support.
As community-driven software, open-source BI tools can be very flexible and customizable, but they can also be early-stage solutions with experimental dashboards and unfriendly interfaces.
A business might choose open-source BI if they have a policy of supporting open-source solutions and an in-house developer that can adapt the software’s coding for customization purposes.
Open-source solutions are really intended for developers, so businesses that require an intuitive interface with a full spectrum of functions and integrations are more likely to select an alternative. The priorities aren't always the same, so it's important to understand which features are most important to your business when choosing a business intelligence tool.
2. Is there an option for an SLA with open-source BI?
A service-level agreement (SLA) - which defines the quality, availability, speed, and obligations of service - is often offered with an open-source solution depending on the vendor. SLA’s are normally recommended as, without one, any bugs and fixes have to be handled by your IT team.
3. How easy is on-premise BI to deploy and set up?
As long as you have a server and IT team at the ready, on-premise BI should be just as simple to deploy and set up as it is with the cloud, but ultimately it depends on the tool you're using.
In the case of Trevor.io, the data analytics software is rapid to implement in the cloud or on-premise - one of the reasons why this isn’t always the case, though, is related to data processing, which we talk about next.
4. Is there a lengthy data-cleaning process?
Data cleaning can be an important step in accurate data analysis, but it also slows down the speed at which your team can find the answers they’re looking for.
Your sales and marketing teams need to have a conversation with your data, where they can make speculative queries with follow-up responses, and then continue to gradually narrow in on the information they really need. But that’s not possible without a fast-response BI solution.
So choose a tool that gives you the option of prioritising clean data or fast-response time.
5. How scalable is your BI solution?
Of course, you need a scalable BI solution if the goal is to grow your business - and cloud solutions are highly scalable in theory. But depending on the provider’s pricing model, cloud BI can become very expensive to expand.
Yes, your cloud’s data capacity can increase (or contract) according to your business needs - plans are adjustable and, especially at enterprise level, negotiable with sales - but if you move from a small startup to being a much bigger operation, the additional per-user costs could become a problem.
If additional users are so expensive you have to limit the access that marketing and sales teams have to your analytics, you’ll start losing the benefit that BI offered you in the first place.
There are other possible barriers to scaling efficiently with cloud BI, including:
- Limited real-time reporting
As your data requirements increase, a third party may struggle to refresh data at the same speed
- Greater security risks
The cloud provider’s security infrastructure could your requirements when you were a small company, but that doesn’t mean they can scale with your growing needs
- Data transport costs
Expanding the infrastructure required to transfer data to the cloud becomes increasingly expensive
With self-hosted BI, you don’t have the same issues that you’d encounter with a third party struggling to meet your data demands - those demands are your own, and are likely to have grown in line with the rest of your business operations.
6. Does the tool integrate with cloud-based third-party solutions like Zapier, Slack and Hubspot?
Whatever new solutions you bring into your organisation, you want them to mesh as smoothly as possible with your existing tools and workflows, so this is something you should factor into your decision-making on data analytics software.
The best platforms - whether cloud or on-premise - give you the option of connecting directly to your preferred third-party apps. So make sure your BI tool connects live data to Google Sheets and Excel, and integrates seamlessly with Slack to give you quick-and-easy viewing and sharing across your business.
Note: Trevor Self-hosted live streams results to Google Sheets, sends results to your email, and sends data alerts directly to the Slack channel you specify.
7. Will you still have access to product updates?
An important consideration for self-hosted tools is whether you get the same latest updates that the equivalent cloud solution offers.
In fact, automated cloud software updates can sometimes be problematic, since in-house developers and end-users aren’t always ready for the changes that are implemented by a third party. With self-hosted BI, though, you have far more control over when updates are implemented.
That said, a top self-hosted BI solution will still provide you with all its product updates along with an attentive support team.
8. Is on-premise BI better than cloud BI?
On-premise and cloud BI could each represent a great solution for you - but it comes down to your business specifics.
If you’re a small operation, with no IT team, and you’re not envisioning a sudden surge in the volumes of data you’ll be managing, cloud BI might be your most practical option.
But look into what the hidden costs are first, such as data transport expenses, additional users, and added functionality. You don’t want to be in a situation where you’ve opted for a cloud service because of the low upfront and maintenance costs, then a few months later have to strip that project down because other costs have escalated.
If, though, you’re handling sensitive data, cloud BI may be off the table because of the compliance requirements. In this case, you need an on-premise/self-hosted BI solution. Likewise, if your business manages large volumes of data, on-premise BI will be a faster and less costly solution.
9. Is self-hosted BI right for you?
The most popular reason why businesses choose self-hosted BI over cloud BI is data security. So if your business operates with sensitive data in a region where there are tight restrictions on how that data is managed, a self-hosted data analytics tool could be your best option.
But meeting the regulatory requirements isn’t enough - you also need a solution that’s quick to deploy, and easy for the end-user - and while there are some great BI tools out there, you should be looking for one that can integrate with your existing workflows.
10. What are the top business intelligence tools?
Take a look at this bite-size rundown of the best BI tools in the business. For a more in-depth discussion on each one, read our guide to the best on-premise business intelligence tools.
Best for companies dealing with regulatory limits on sensitive data, is Trevor.io the outstanding choice if you value advanced functionality, seamless integrations, and beautiful dashboards? We certainly think so!
- Tableau Server
This self-hosted solution is designed for teams to manage, edit, and share data using Tableau dashboards. It offers auto-refreshed data, an intuitive interface, and is catered for medium to large-sized companies.
- PowerBI Report Server
Power BI Report Server is the on-premise version of Microsoft Power BI. Like many Microsoft offerings, it’s a powerful tool that’s not always very accessible.
- Metabase (open source)
Metabase is a user-friendly open-source tool with useful filters and easy-to-create data visualisations - a good option for small startups.
- Looker (customer-hosted)
Looker is a browser-based BI tool with customisable, user-friendly, dashboards. Owned by Google, Looker is aimed at large enterprises with big deployment and maintenance budgets.
- Zoho Analytics on-premise
Highly customisable with attractive dashboards, Zoho Analytics is a strong option if you’re already using other Zoho tools.
A powerful tool with regular product updates, Domo is aimed at big-budgeted enterprises.
Choosing the best BI solution for your business
As we’ve seen, there are compelling reasons to opt for an on-premise tool, where you should expect a range of advanced solutions for companies managing sensitive information.
You may have higher maintenance costs with on-premise, but these could be dwarfed by the hidden costs of a SaaS BI solution as your operations expand.
That said, if you’re a small team without the infrastructure to manage on-premise BI, the cloud could be best for you.
What’s important, then, is to factor the key questions into your decision-making. You need to look at:
- Ease of implementation
- Your infrastructure limits
By asking the right questions of your business intelligence tool, you can get the data insights your team needs.
Want to see if Trevor.io would work for your team? Try it free for 2 weeks!