This blog entry is part of a series that reviews and discusses recent reports from Gartner.
Comparing cost of ownership – or TCO (Total Cost of Ownership) – is often a compelling way to rate and compare software and hardware vendors. However, there is an even more compelling metric to consider: ROI (Return on Investment). Instead of proclaiming the strengths of ROI, let’s look at where TCO falls short.
In the Gartner report, "BI Platforms User Survey, 2011: Customers Rate Their BI Platform Vendor Cost of Ownership," Gartner has many findings and in-depth analysis that support the argument that TCO is not a good comparison when results obtained with the products are materially different. For example, one of the Key Findings is:
In general, ease of use, lowers implementation costs, but also affects factors such as the complexity of analysis performed by users and breadth of product use across BI platform capabilities.
It appears that Tableau customers are using more of what they paid less for. This should be represented as a good thing; however due to Gartner's definitions of administration which are geared toward the mega vendors, this ease of use, breadth of deployment and wide-spread adoption by business users actually counts against Tableau. Consider one of the many comparisons in the report where Tableau is very positively placed:
Source: BI Platforms User Survey, 2011: Customers Rate Their BI Platform Vendor Cost of Ownership, 29 March 2011, Rita L. Sallam, Gartner Research Note G00211906. Chart represents customer perception and not Gartner's opinion.The chart may feature vendors that (in Gartner's opinion) do not deliver the functional capability described.N=1,127
Note that a smaller bubble is a good thing – it means lower implementation costs. Unfortunately this means that Tableau is just a tiny blip in the upper right corner due to Tableau ranking lowest on implementation costs. This is a telling graphic. Tableau is both the easiest to use and has the best integration score. Logic would then dictate that TCO and administrative costs would be low. Despite this, according to Gartner, Tableau ranks in the highest quartile for Total Business Intelligence Platform Ownership Cost (Figure 2).
Source: ibid. Cost is adjusted for Complexity (according to Gartner). Total administration costs are annually recurring. They are based on the number of IT and business administration full-time equivalents reported by respondents. [Tableau note: every person reported as an author or creator (i.e., Tableau Desktop user) is counted as a full-time business administrator.] This number was multiplied by an average annual salary cost. This chart shows the first-year costs only. N=718
Tableau's placement is due to Gartner's calculation of high administration costs which counters Tableau’s own experience. Tableau’s customers actually report very low IT administration costs. For example, a large energy company in Calgary reports running their entire BI Platform on Tableau Server with one part time report developer and a fraction of a server administrator. In total, less than 1 FTE to support the 1000 user deployment with 3 major BI initiatives. And not only are their BI projects delivered early, their functionality exceeds requirements.
This example, and many more like it, do not compare well with Gartner’s findings because Gartner decided to include all users of development tools as administrators. Tableau has no developer tools, only applications designed for business users. In fact, Gartner found this as well and states:
Tableau [has] above average total administration costs while all data discovery vendors have above average administration costs per user. This can in part be explained by the fact that in data discover deployments, more and more end users are also administrators. For Tableau … a higher proportion of administrators are business users rather [than] IT professionals – not the case for most other vendors.
So why bother comparing TCO when major factors in its calculation are so varied in definition? Traditional "mega vendors" (Business Objects, Cognos and Microstrategy) offer little differentiation in functionality, ease of use and license cost. In this type of situation, TCO is a valid comparison. But when, as Gartner states, there are other compelling shifts in use cases and achievements with BI platforms, then TCO is no longer a valid comparison – ROI is what matters. And what better way to achieve a great ROI than to enable business users to answer and share their own questions without the need for an IT project? According to Gartner, that is what Tableau customers accomplish with low license costs, quick implementations and broad success.