Analytics as a Service 1

Fact: data and analytics are critical success factors in the survival game called business.

Now that we’re on the same page, the next big question is how to enable effective analytics within your company. There is a vast selection of approaches to choose from and one can easily get lost in the jungle of different solutions provided. Data warehousing, data pools, self-service analytics and data mining just to mention few terms from the domain.

However, I thought it would be worth to emphasize one option: Analytics as a service (AaaS).


What is Analytics as a Service?

Simply put, Analytics as a Service (later AaaS) is an analytics software and a framework provided by using web-services, usually with a monthly fee. Similar to Software as a service (SaaS) or Platform as a service (PaaS), AaaS replaces company’s internal systems and hardware with cloud and web-based solutions.

In a general setup, data from business systems (and external sources) are loaded to a cloud. Then, the service provider’s data and analytics software does its magic to model, transform and manage the data. That refined data is then presented in an analytics application through the web.


What are the benefits of AaaS?


1. Time and cost savings

By utilizing AaaS, you can reduce cost of your company’s analytics setup remarkably. This can be achieved, for example, through eliminating on premise or hosted servers and other hardware, which are usually dedicated to analytics processes only.

Furthermore, Less IT resources are needed to maintain the solution and do manual tasks. Not even mentioning the efforts which are saved from adjusting to new, everchanging business requirements each time they emerge.

2. Centralized data definitions, models and management

AaaS enables a centralized framework to help keep you on top of your data. When data models, business and calculation rules and analytics processes are defined and managed together with the service provider, it creates a robust framework to understand data and its implication to your company. This ensures transparency to the analytic processes and your company’s precious data.

3. Scalability

One of the most prominent benefits of AaaS is, that it is very easily scaled up to suit your company’s growing needs. Cloud storage and computing support large data sets, big data, utilizing external sources and so forth. Through this, you are not limiting yourself with requirements for additional servers and hardware if your data and analytics processes exceed the current specifications. There are no limits to a cloud (?).


Are there any risks involved in AaaS?

I would like to emphasize two things risen from discussions with business leaders.


1. Black Box

One of the concerns presented is related to the fact that as you outsource your data management and analytics to a service provider, you are losing ownership and visibility to your data, thus creating a black box. If executed poorly, this can be the case. However, this can be the case already when working with your technology providers who control for example your ERP.

This is where the work done together with the provider to define and manage the framework becomes crucial. When done properly, it becomes a benefit for your company, ensuring transparency and full control of your analytics processes.

Choosing your AaaS partner is key.


2. Data security

Cloud is not a mystical beast. Your data does not float in a vacuum while in cloud. It is just managed and stored differently from an on-premise solution. Established cloud providers are adamant in staying ahead in the data security game. It is their success factor and they intent to keep it that way.

Also, when analytics are provided through the web, there is always a chance that someone malicious could access your analytics portal. In the current way of the world, there is always the possibility, yes. But again, carefully choosing your partners and with open collaboration, you are making sure that the security protocols are up to date.

Choosing your AaaS partner is key.


All in or something in between – a hybrid approach

Can you choose best of both worlds? Of course you can! You can make the decision on how much and what part of your analytics you want to outsource and what to keep inhouse. It is a matter of what creates the most value for your company. And if going with a hybrid model, it is good to keep in mind, that the AaaS part of your analytics can always be adjusted when business needs change.


End game of inhouse analytics?

As mentioned above, AaaS is not necessarily the end of inhouse analytics. There are many pros and cons for each approach and you just need to validate the best fit for your company. For AaaS, benefits outweigh the risks in many occasions, but it might not simply be aligned with your company’s strategy and goals.

Whatever your thoughts of Analytics as a Service are currently, I urge you to be curious and find out if it would be your company’s success factor.


Read more about data and analytics


Mikko Eriksson is a Head of Business Analytics within Capacent in Finland. He has over ten years of experience in Business Intelligence solutions in various industries and functions, e.g. within IT, Finance and Commercial.

If you are wrestling with translating data into insights or simply do not have the resources to do that, do not hesitate to contact Mikko ( for more information on how we can help you to create sustainable value in your business.