Amazon’s new BI tool may hurt more of its partners

AWS’s data analytics tool could disrupt the business intelligence market

Each year at Amazon Web Service’s re:Invent conference the company announces a new service that seems to compete directly with third-party independent software vendors (ISV) who offer the same type of product through the AWS Marketplace.

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A few years ago AWS rolled out the Trusted Advisor platform, which helps customers monitor their usage of AWS’s cloud and provide recommendations of how to save money by using it more efficiently. Before that announcement there were a handful of vendors who specialized in doing the same thing. The introduction of Trusted Advisor caused consolidation in the market with some vendors being bought out and others scrambling to differentiate.

The same thing could happen this year with the introduction of Amazon QuickSight. The company announced the business intelligence (BI), data analytics and visualization platform at re:Invent and in effect has put many of its BI partners on notice. “BI pros will need to pay close attention, because this new platform is inexpensive, highly scalable, and has the potential to disrupt the BI vendor landscape,” wrote Forrester analyst Boris Evelson.

Just like in years past though, ISVs in the BI market say they’re not threatened by AWS’s entrance onto their turf.

“QuickSight … will be for lightweight visualizations of data stored in AWS’s cloud,” says Ashley Jaschke, director of product management at Tableau Software, a BI vendor that has been highly ranked in Gartner’s Magic Quadrant. “Most companies still have data outside of AWS.” Tableau can ingest data from multiple sources and Jaschke says it provides deeper insights, mapping, dashboarding and story points. “It’s really a full-powered BI solution,” she says.

Amazon quicksight

Amazon QuickSight requires data to be in the company’s custom SPICE database for the product to analyze it. Jaschke says Tableau’s differentiator is that it can collect and analyze data sitting anywhere – be it in AWS’s cloud, in other cloud providers like Salesforce, or in apps on customers’ premises.

Evelson notes that the BI market is saturated with more than 50 vendors and seemingly new startups entering all the time. Perhaps for good reason: He says the BI market is a “runaway locomotive that just keeps picking up more and more speed in terms of enterprise interest, adoption, and spending levels.” But Amazon “crashed the party” with the introduction of QuickSight, he says.

QuickSight is powered by a Super-fast, Parallel, In-memory Calculation Engine (“SPICE”), which AWS says performs calculations and quickly renders visualizations. It starts at $9 per user per month and is available in a preview now; an enterprise edition with faster throughput and encryption capabilities is double the cost and storage in SPICE costs $0.25/GB/month.

At the least QuickSight will put significant price pressure on BI vendors, Evelson says. As a comparison, Tableau’s cloud-based offering starts at $500 per user per year, while the on-premises Desktop version runs $999 per user per year. Evelson says expensive, high-margin on-premise software vendors will be most vulnerable to be disrupted by QuickSight.

QuickSight does have its limitations though – as Jaschkle points out, it is best for data that’s already stored in AWS’s cloud, and specifically data that can be imported into SPICE. Evelson says that makes QuickSight a good proof of concept BI tool for people who want to get started with BI, especially for greenfield applications and workloads that are born in AWS’s cloud. The total cost of ownership (TCO) over the lifetime of the product, and the lack of connectors with other enterprise apps means it could have limited functionality for many customers, Evelson says. But the speed with which QuickSight can be spun up, the ubiquity of allowing any member of an organization to get BI analytics is a powerful proposition, he says.

AWS is a BI vendor now – just like Salesforce is with its Analytics cloud and Microsoft is with its PowerBI. It’s a natural progression for cloud vendors to offer analytics capabilities for data already stored on their platforms. It just may come at the expense of third-party ISVs who saw that opportunity first.

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