Located: San Francisco, California
Market: On-demand Business Intelligence
Products: Business Intelligence Suite
Key Customers: Children’s Choice Learning Centers, Citrix, Key Technology, Rackspace Hosting, RBC Wealth Management, Securian, UE Vision and Metro Atlanta YMCA
Blog: Birst Blog
I asked, Brad Peters, CEO of Birst a few questions about his business and his view of the SaaS market in 2010.
Did you start out as a Software-as-a-Service company?
I started Birst after leaving Siebel Systems, where I was running the Siebel Analytics products, that are now owned by Oracle. My team managed the analytics platform and applications for all business intelligence, which at the time was competing with MicroStrategy and BusinessObjects.
When Siebel was sold to Oracle, our division was the biggest business at Siebel and was growing fast while all other business lines were shrinking. What we were finding is that BI was better tuned for changing buyer preferences of better, faster cheaper than were our existing enterprise CRM products.
At Siebel, we saw value of analytics and SaaS and because of that, Birst was started as a real BI SaaS company. It was really hard to get to true SaaS since many of our initial customers were large financial services companies back in 2004, who wanted customized solutions. We figured out how to build and deploy products quickly but we didn’t want to build these giant, complex, customized products. SaaS was a great way for us to get back to basics.
What is interesting is that CRM problems are similar to BI business challenges. Business Intelligence is more dispersed than CRM with multiple data sources, scoreboards, dashboards, data transformation, and reporting. Because it is complex and data comes from many different places, that’s why many companies have often given up and just used Excel to solve these BI challenges.
We started the company in 2005 with the philosophy that BI is never going to be easy, but if we could solve the problem for large companies, then we could charge more for our solutions. Birst launched a simpler self-service version in 2008 which only took ¼ of the time and resources that it took to deploy traditional BI from firms like BusinessObjects or Cognos, but customers get the same functionality.
At about this same time, we discovered that other BI providers were cheating, by using a single-tenant, or a ‘fake SaaS’ approach, they would also cripple their product’s functionality or offer just a single table. This approach just frustrates customers. Birst can also access data wherever it lies, even if it is on-premise, in existing systems, which saves customers costs and cuts out huge chunks of deployment time.
Why do your customers buy from Birst?
SaaS BI is not just Excel on the Web; it is hard to develop and deploy true BI. Actually is easier to develop a CRM system. We also believe that delivering incremental and value-add BI capabilities is also difficult. BusinessObjects and Cognos have never launched a product on single platform, and often orphan older products.
The current SaaS BI market is not about ‘rip and replace’, our customers don’t want to do that because it has been expensive and painful to get to where they are today. More customers want to extend their existing BI investments. For traditional BI firms this is difficult because all of their product suites are an amalgamation of different products and companies they have purchased. We find that our target customer has spent a minimum of $250K rolling out an enterprise BI solution. If you can’t pay that amount, you do without and use Excel. A good example of this is one of our customers Metro Atlanta YMCA, who is using Cognos for finance but the marketing department wanted to use it too but didn’t have the resources, now they use Birst to extend Cognos, which is a great alternative.
Our products appeal to companies that have dispersed groups and are looking to pull data from many different sources and run centralized reports or create dashboards. Organizations like sales, finance and even supply chain appreciate the flexibility of Birst.
One lesson we learned was that the toolkit approach to BI or transforming BI into data applications doesn’t really work well for customers. At Siebel we sold sales and marketing analytics applications that came with hundreds of pre-packaged reports but our customers never used them because their data models were all different. In the end, one size doesn’t fit all, because you have to match the BI product to each customers business model. Birst delivers a set of templates for sales, finance, and supply chain that deliver 80% of the functionality required and this helps to reduce our implementation times dramatically. BI doesn’t fit easily into a box, your tools need to be flexible and deployment should just be personalizing the last 20% of the solution.
Birst sells to both IT and Line of Business executives who are frustrated getting access to important business information and IT is constrained and they want to get the BI monkey off their back without sinking their organization.
What do you see as the key trend emerging in the SaaS industry?
I think the major trend we are seeing is that SaaS is migrating to mainstream acceptability. People didn’t even know that SaaS existed five years ago and at that time was still an early adopter market. Salesforce.com has done a great job evangelizing the SaaS business model as well as convincing customers that Cloud Computing and SaaS are more secure than customers may have thought. Today we don’t have to do a lot of basic SaaS education because the market is well along the maturity curve.
The other major trend is industry consolidation of the major BI vendors into mega suites. This high degree of consolidation is resulting in a feeling of vendor lock-in, which is disenfranchising customers because there are fewer pure play BI alternatives.
What is your outlook for 2010?
We have been working hard on launching Birst 4, which is a huge leap forward in our plans to bring a full SaaS BI solution to market. During 2009 we continued to build out our company, to be ready to go to market this year. We also announced big partnerships with Salesforce.com, RightNow, OEM partners and 30 system integrator partners.
I find it hard to correlate our business success to the outside economic conditions. We get the sense that the economy is loosening up but our future is going to be more determined by how well we execute on our business in 2010 and beyond.