Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Birst: When the Cloud Isn’t Always in the Cloud

“Business intelligence” is a phrase we’re hearing a lot these days, and there has been plenty of start-up activity around it. Cases in point include Utah-based Domo and Good Data.

Now we have another entrant called Birst, which today will announce what it calls a Business Intelligence appliance. No, it’s not hardware — that’s what I thought, too . It’s actually software that you install locally on your own on-premise servers. And yet it’s still a software-as-a-service (SaaS) offering. How does that work?

Having already become a player in the basic cloud-based BI business, the company realized that most of the data that makes BI valuable in the first place doesn’t live in the cloud but actually is used with applications that run behind the firewall.

I talked with Birst co-CEO Brad Peters, who told me that the software runs like a SaaS product — you access it through a browser, just like you would any other typical SaaS product, and you get the same benefits, including zero worries about upgrading or adding new features. But you also get the benefit of having it run on-premise behind the firewall. “It’s the exact same experience as with the cloud,” he says.

The whole point of BI, Peters says, is to take data created in various business applications — whether it’s SAP,, Concur, Omniture, Siebel or what have you — into a dashboard, where it is arranged into a graphical presentation or report that you can then use to make business decisions.

The textbook case for BI is comparing data on marketing spend to deals. If you find you’re spending a lot of money on one type of marketing campaign that seems not to be generating leads and deals, and not enough on one that seems to be working better, you can see the pattern and make needed changes, Peters says. “What BI is really about is taking the raw data and synthesizing it so that business people can act on it,” rather than relying on spreadsheets.

Big companies like SAP and Oracle are in the BI business, too, but their solutions cost a lot of money and are therefore aimed more often than not at bigger companies. Yet Birst has its share of larger customers: Citrix Systems is a Birst customer, as is Rackspace, the Web and cloud services host.

So far, Birst has raised a combined $20 million in two rounds from Dag Ventures, Sequoia Capital and Hummer Winblad. Peters said the company is keeping most of its funding details close to the vest — he wouldn’t say how much Birst’s most recent round was, for example — arguing that there’s been too much attention paid so far to BI start-ups and how much money they’ve raised. “Ultimately, a software company needs to make money, and BI is really hard,” he says. “You can waste a lot of money really easily. There’s been about $300 million raised by companies trying to do BI, so clearly the amount of money raised doesn’t correlate to success.” Those sounds like words to the wise.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik