May 8, 2008

Outsourced data marts

Call me slow on the uptake if you like, but it’s finally dawned on me that outsourced data marts are a nontrivial segment of the analytics business. For example:

To a first approximation, here’s what I think is going on.

Privacy laws force some outsourcing. It’s often OK to use credit data to decide what you’ll market at whom, even when it’s not OK to actually see the credit data itself. What’s more, in some cases data can’t leave a country, so if you don’t have critical business mass in that particular country, it’s natural to use an outsourcer who does.

Privacy even aside, owners of proprietary data are natural analytics outsourcers. Either you ship your data to your customers to do with as they please — and impose on them the expense of managing it — or you manage it for them.

Analytic “secret sauce” software providers also are natural outsourcers. Most proprietary analytic rules are pretty simple-minded. Outsourcing preserves mystique and pricing power.

The usual benefits of SaaS apply. Fast set-up, no fixed costs, etc. are all goodness, just as they are in the transactional world.

With that as background, the big change in the analytics outsourcing market is the same as the one sweeping the rest of the analytics world — interactive access to detail data is finally becoming affordable. If you just run weekly or monthly reports, and there may be no reason to distinguish between analytic and transactional processing. But if you want to allow ad-hoc query, unlimited drilldown, or live dashboards, then you’re talking a serious data mart technology stack.

And I do mean “data mart”. Outsourcing an enterprise data warehouse, with all of your proprietary transactional data, doesn’t make much sense unless you’re a complete SaaS shop already outsourcing that data in the first place.


3 Responses to “Outsourced data marts”

  1. DBMS2 — DataBase Management System Services » Blog Archive » Vertica update on May 8th, 2008 1:39 am

    […] another Vertica briefing. Primary subjects included some embargoed stuff, plus (at my instigation) outsourced data marts. But I also had the opportunity to follow up on a couple of points from February’s briefing, […]

  2. DBMS2 — DataBase Management System Services » Blog Archive » Vertica in the cloud on May 13th, 2008 7:48 am

    […] This is a natural fit for new or existing Vertica customers in data mart outsourcing. […]

  3. Database SaaS gains a little visibility | DBMS2 -- DataBase Management System Services on January 12th, 2009 11:47 am

    […] Way back in the 1970s, a huge fraction of analytic database management was done via timesharing, specifically in connection with the RAMIS and FOCUS business-intelligence-precursor fourth-generation languages.  (Both were written by Gerry Cohen, who built his company Information Builders around the latter one.)  The market for remoting-computing business intelligence has never wholly gone away since. Indeed, it’s being revived now, via everything from the analytics part of to the service category I call data mart outsourcing. […]

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