Business analytics is rapidly becoming a priority for companies of all sizes. While enterprise-level business intelligence (BI) software has seen a great deal of investment in recent years, small and midsize businesses (SMBs) are also well served by robust BI software tools. Real-time, tracked data equates to power in the market, so it's no wonder that a move to cloud comes with increased analytics growth.

State of the Market

In 2012, the business analytics software market is heading for an 8.9-percent increase, according to a recent article at BusinessWire. This will bring the total spent annually on analytics up to $33.9 billion, and Dan Vesset, a program vice president for business analytics solutions at IDC says that this increase comes as a result of business analytics finally being recognized as a formal management disciple, in large part because of its ability to "improve decision making and analytics processes." Oracle currently leads the market in analytics software, but companies like IBM, SAP, and the SAS Institute are all starting to see significant growth. Approximately 300 vendors operate in this tech space now, with 14 of them doing $100 million or more in software sales during the first half of 2011.

Part of this growth can be attributed to the larger market companies must reach--SMBs need data to keep their profits in the black just as much as enterprise corporations--and this growing market represents the easiest way for newcomers to the world of BI software to find success. SMB IT managers look for robust systems that incorporate social media tracking and collaborative tools, and they want BI providers that offer ways to grow side-by-side with the market, or upwards, as the case may be.

Intelligence in the Clouds

In addition to growing as an industry, BI software is also seeing significant movement into the cloud as software-as-a-service (SaaS) options become more substantive. A Forbes article detailing business intelligence trends reports that in fourth quarter of 2011, 17 percent of businesses in a recent survey had moved their core BI functions to the cloud or had plans to do so. Though that number isn't terribly impressive or surprising, since many businesses are reluctant to relinquish control of essential processes, 27 percent indicated that they either already use cloud BI options for specific segments of their analysis or plan to incorporate some form of cloud software in the next year.

According to James Richardson, a research director at Gartner, "SaaS- and cloud-based BI is perceived as offering a quicker, potentially lower-cost and easier-to-deploy alternative." His company has found that while both quick implementation and low cost are relevant factors in the increase of cloud-based business intelligence software, many SMBs are also driven by a lack of expertise in their own ranks. A pre-built, automatically updated solution means less IT management investment than required for an on-premise system.

Right now, BI in the cloud is largely unproven - models simply don't exist past a year or two of adoption to predict overall cost or benefit. Despite the relative unknowns of moving to an SaaS alternative, many SMBs find the ability to almost instantly begin collecting data appealing, helping to drive profitable predictions for BI suppliers.