How to Create an Analytics-as-a-Service Business

By Pedro Pereira 1

While data analytics is hailed as a significant opportunity for MSPs, few providers at this point have the wherewithal and fortitude to invest in an analytics practice. But those that do are starting to reap the benefits.

One such MSP is Key Information Systems, Agoura Hills, California, which launched an analytics practice earlier this year after investing in a data center in 2013. The data center enabled the company to round out its customer offerings, including hybrid cloud hosting, connectivity, a fiber ring around the Los Angeles area, and now the analytics business.

“The data center is a significant success story, and we are in the ramp-up stage of the analytics practice,” says KeyInfo CEO Lief Morin. “The investments we made were done strategically as a result of what we perceived as a dramatic increase in deployment of cloud and analytics technologies.” KeyInfo, he adds, is committed to participating in those macro industry trends.

Analytics as a Feature

Leveraging the concept of “data gravity” – its ability to attract applications and services – KeyInfo is turning analytics into a feature of business systems, says Mark Laughlin, KeyInfo’s director of enterprise technology. Analytics capabilities become a given, something users expect to be there, much as you do with mobile access or user authentication.

“It’s going to be a feature of their applications. The customers now have a dashboard with answers to their questions,” Laughlin says. Rather than, for instance, running a SQL request for data, it’s readily available through the dashboard.

The analytics engine taps the data layer of the application to extract value. It’s like wringing the attar from a plant, but instead you’re plucking insights hidden in unstructured and structured data. When sorted, they reveal trends and patterns that can inform strategic decisions to shape the future of a business.

And the process is quick, says Laughlin. No more waiting 30 to 50 hours to compile a report. Instead, you get the data in a few minutes. And rather than buying SQL servers and expensive BI (business intelligence) software and infrastructure, customers pay a monthly fee for analytics as a service.

Huge Market Potential

Transforming large piles of disorganized data into business insights helps improve business agility and hone processes in unprecedented ways, as manufacturers get better about managing inventory and predicting market fluctuations, retailers learn to better navigate seasonal demands, and businesses in general become more predictive and get products to market faster.

IDC predicts the big data and analytics market will grow at a 26 percent annual clip to $41.5 billion in 2018. That’s about six times the growth rate of the overall IT market, the research firm says.

But for MSPs to play in this market, they have to make a substantial investment in technology and expertise or partner with a vendor that hosts the technology so they can sell it as a cloud offering.

The Right Staff

Laughlin says launching an analytics practice requires several key elements – vision, people and technology. You have to hire the right people, he says. And those people tend to be professionals who understand line of business, not necessarily hardware engineers focused on technology. A former CIO or sales manager has a keener sense of what the different business units need to find in the data, he says.

Having a data center to execute your vision is essential, Laughlin says. “If you don’t have a data center, I honestly don’t know how you would do it.” A vendor partnership is an option but you’re limited to what the service entails, he says.

Laughlin admits he was nervous when KeyInfo’s CEO pulled out his checkbook to acquire a data center but now is glad he did. Even in the early stages of the analytics practice, he sees the huge potential to support customers in new ways.

Pedro Pereira is Massachusetts-based freelance writer with two decades of experience covering and analyzing the IT channel and technology. He can be reached at [email protected].