Rules change for self-service BI subscription pricing models

As self-service BI tools become commonplace, look for subscription pricing models to change according to the cloud, group data usage pricing and how data is shared.

There are many self-service BI tools on the market that offer a wide variety of features and functionalities for dashboard creation and visualization.

These tools come with their own subscription pricing models, and some of them might even be free of charge. But "to evaluate which product and pricing model to select, it's important to understand the tool's features, security and scalability," said Aireen Omar, deputy group CEO for digital, transformation and corporate services at AirAsia Berhad.

SaaS self-service BI tools are here to stay, and they make a lot of sense for most organizations. Reasons include security, procurement, keeping up to date with the latest patches, and the ability to quickly spin up and down a user license based on the need to make a product more attractive.

"To get the most out of these tools, look for the underpinning of your data environment to support the tool and provide adequate training for your casual and power users," said Andrew Roman Wells, CEO of Aspirent, an Atlanta-based analytics management consulting firm, and co-author of Monetizing Your Data: A Guide to Turning Data into Profit-Driving Strategies and Solutions.

Pay as you go

Dave McCandless, vice president of IT at Navis, a shipping industry app provider based in Oakland, Calif., advocates for usage pricing instead of enrollment pricing for the company's self-service BI tools. McCandless said he typically gives customers a license, then measures their usage to attain a better sense of cost and whether they make adjustments to his expectations and work assignments, which might be biased toward self-starters and innovators.

In addition, he recommended cheap data storage to make revamping of data retention policies easier and less expensive, as prices continue to drop.

Create a paradigm for subscription services

As new types of subscription services for self-service BI tools emerge, McCandless said to expect a huge revolution in how people share data and what that will cost, as well as the people and companies that are rented to manage the data and connectivity to other available data. This expectation will make it easier to embrace a plethora of yet-to-be-invented business processes that will continue to drive down costs and enable higher productivity.

"Overall, providers are trying to make pricing as easy as possible for users," said Richard Barnett, senior vice president of marketing at LevaData, a cognitive sourcing service provider based in San Jose, Calif. "Fewer pricing models are based on the amount of data used, as this can be somewhat opaque for the end users and difficult to predict."

Barnett said he sees a trend in subscription pricing models: moving away from per-seat pricing to subscriptions that provide a broader reach. As self-service BI tool providers seek more users, they're changing pricing based on the number of insights or other usage measurements. In some cases, they're charging by group or department, regardless of the amount of users. Part of their reasoning is to acquire more individual users outside of the IT department.

Providers are also making it easier to embed their analytics into existing platforms with standard APIs and connector feeds. Barnett said he believes managers should find a balance between encouraging users to rely less on IT resources and partnering with IT to ensure data quality and standardization.

Target your investments

Overall, providers are trying to make pricing as easy as possible for users.
Richard Barnettsenior vice president of marketing, LevaData

To get the most value from self-service BI, managers need to think strategically when it comes to investing in certain tools. Many platforms rely on promotions that allow customers to use products free of charge for a specified period of time, but that often translates into higher costs. Further, subscription pricing models can be complicated and service levels hard to calculate, warned Rob Perry, vice president of product marketing at ASG Technologies, an IT service management provider based in Naples, Fla.

To be sure of investing in the right products, managers should first understand the portfolio of analytics tools currently being used in their organizations. Perhaps those tools are more cost-effective and provide similar functionality, compared with new SaaS offerings -- even after paying for a higher service level. If that's not the case, then perhaps the existing license or subscription should be cancelled and replaced with the new SaaS tool.

In any event, don't be reluctant to engage outside sources, such as the analyst community, for guidance.

Watch out for hidden costs

Most of the major players are moving to cloud-based subscription pricing models that can vary widely in price and infrastructure costs. And, sometimes, those costs are not readily apparent.

One hidden cost, for example, might be high transit fees when cloud data needed for self-service BI tools needs to move across availability zones. Still, another hidden cost could arise from server license fees. To help keep data transit costs in check and eliminate server licensing costs, Dominic Go, director of analytics at Olivela, a luxury retail site, used a software development service that works only with cloud data warehouse technologies on the back end.

Know your limitations

Because subscription pricing models vary according to needs, volume and other factors, managers need to assess weaknesses in these models so they can invest in the appropriate licenses and support.

"Our technical team didn't have a lot of free time to help integrate our BI software," said Joshua Strebel, CEO of Pagely, a managed WordPress service based in Tucson, Ariz. "So, it was important to find a service that could meet us in the middle on getting everything set up."

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