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January 21, 2009

Avoid the Dragonfly's Sting: The Importance of the BI Licensing Model

Surf the web for prices of business intelligence solutions, and you'll find something is almost always constant: end-user license fees.

I look at end-user license fees as being like dragonflies: throwbacks to another geological era that somehow have survived to our times and become so commonplace as to not even warrant a double-take. Why am I saying this? Let me explain.

User license fees make very much sense--in case of a desktop software. Ever bought a copy of Adobe Photoshop? The company releasing the software has to charge by the individual download, or else they would be in the charity business. In the geoogical era when all BI solutions were desktop, therefore, this licensing model was perfectly logical.

However, in this millennium things have changed, or at least they should have. Business intelligence software now runs on the web--you know, that nifty little invention by Al Gore that allows people to stay in touch in real time through email, to read the news as they develop without running to the corner-store and buy the latest edition... That wonderfully democratic tool, that allows Joe Sixpack to leave a comment on a Wall Street Journal article and have it appear in seconds for thousands to read... Or Jane Sixpack to leave a nasty review of that restaurant where she was forced to push back not one but two orders of under-done salmon... Yes, that web.

So, while business intelligence vendors have tripped all over themselves and each-other to create the best and brightest web-based BI application--with megatonic dashboards, zingamorama visualization features, hubba-bubba drill-down and drill-through and automatic alerts that stop just short of giving you a morning wakeup call and bringing you a steaming cup of Java--they still license as if they sold that tired old desktop application.

And companies buying BI seem to not have noticed.

The cost of the dragonfly's sting
The sad part is not only how much companies end up spending upfront to enable more end-users to enjoy the benefits of web-based BI. This is bad enough--and somehow, it feels undemocratic. The even sadder part is that, in the real world, BI adoption is something slow and patchy. Not all users get quite as comfortable as quickly as others--while others yet just let the application languish on their desktop, unused, in favor of good old Excel.

What happens then? All the money wasted on unused, underused or partially used licenses is as well chucked out the winder. But to the vendor, that's no concern at all--he's sold you his dragonfly, you've bought it, now it has stung you, your bad.

So, let's fast forward to the Holocene (for those of you geologically-impaired, that's today's time). And let's look at some of the benefits of web-based business intelligence software, the most obvious of which is its being so democratic--all you need is a URL and voila', you're in business.

Why on Earth should you pay for a web-based product as if it was a desktop application? Do I hear crickets? (Or worse yet, dragonflies?)

The evolutionary cusp: server-based BI licensing
In today's web-based world (pardon the cliche'), the only business intelligence licensing model that makes sense is server-based.

You pay for the number of servers and/or processors you get, and then you distribute BI to as many users as you need and that the server can support--with no user fees. This is a much more web-like way to charge, and a much better value for most companies who take the time to actually shop for a convenient, modern BI solution instead of going with the living fossils.

With this server-based licensing model, you have several advantages:

- No wasted money on failed adoption
- A better opportunity to empower more users without paying through the nose
- More flexibility in terms of who gets BI--you don't have to make a decision before buying and then sticking to it
- In the case of an OEM or software manufacturer who embeds BI, a world of financial advantage and quicker ROI

So, when you shop for a BI solution, don't resign yourself to the fact that user fees are something inevitable. They are not. Check out companies that charge server-based, and avoid the sting of the user-fees dragonfly.

Posted by Hound of the BI-skervilles at January 21, 2009 7:45 AM

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