Despite some skepticism from industry analysts about the ability of Software-as-a-Service (SaaS) vendors to deliver viable business intelligence (BI) solutions a few years ago, today’s Cloud-based analytic tools are increasingly demonstrating that they can quickly generate tangible benefits to organizations of all sizes, especially mid-market companies.

The growing interest in Cloud-based analytics is easy to understand given the escalating pressures facing businesses contending with rising customer expectations and intensifying competitive. Businesses not only have to synthesize a widening array of internal and external data sources, they must also make timely and useful analysis available to an increasingly dispersed workforce so they can make better day-to-day business decisions.

The Cloud is the perfect enablement platform for analytic tools to respond to these demands. THINKstrategies sees the Cloud responding in three ways.

First, every leading Cloud solution includes a basic set of analytic tools to satisfy users’ rudimentary needs, including activity tracking and reporting capabilities.

Second, every leading Cloud vendor is tracking usage rates and behavior patterns to better understand how their solutions are being utilized so they can continuously fine-tune and enhance their Cloud offerings.

Third, a growing number of Cloud vendors which have gained a critical mass of customers are beginning to examine how they can package the aggregated metadata they are accumulating to produce useful benchmark statistics and key performance indicators (KPIs) that help users understand how they compare and contrast to their peers. This is a unique value-add which only Cloud-based solutions built on a shared, multi-tenant architecture can provide.

IBM’s recent acquisition of DemandTec is the latest example of the growing focus on Cloud analytics in the marketplace. DemandTec delivers Cloud-based analytics software businesses use to track customer online and in-store buying patterns to identify trends so they can make better pricing, packaging, and other marketing decisions to generate higher revenues and profits.

The DemandTec acquisition comes about year after IBM closed another acquisition of a Cloud-based analytics company, called Coremetrics, which focuses on Web analytics which enable users to develop more targeted online marketing campaigns.

As CIOs’ fears about data security and privacy in the Cloud subside, they are being replaced by a growing interest in utilizing Cloud-based analytics tools and the computational power of the Cloud to attain better insight into business effectiveness.

The most appealing aspect of the new wave of Cloud analytic solutions is that businesses don’t have to invest millions of dollars to build costly data warehouses, implement complicated BI software, or hire an army of expensive consultants to try to gain a competitive advantage.

Instead, a growing number of enlightened IT and business decision-makers in mid-sized enterprises are recognizing that they can take advantage of a widening array of Cloud-based analytic tools to achieve their corporate objectives at a fraction of the cost, in far less time, and without the risks associated with legacy BI systems.

This is particularly important to mid-size organizations which lack the skills and financial resources to make major investments in BI systems. Cloud analytics gives these mid-market enterprises tools they otherwise could not afford, and levels the playing field to enable them to gather and interpret real-time data to better compete with larger players and start-ups.

Disclosure: This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

cloud analytics DemandTec IBM midsize business