calculated how much business spends on Russian BI solutions

It is known that a BI solution is an expensive purchase, even by the standards of a large company. In addition, the process of selection, purchase and implementation is costly and time-consuming, that is, the customer also bears the costs. We are in the project Easy Report decided to calculate how much BI actually costs for Russian companies. We conducted a small study, the results of which I will discuss in this article.

Why did we take only Russian BI solutions?

Until February 2022, there were many BI solutions on the Russian market – Microsoft Power BI, Tableau, Qlik and others, each of which had its own advantages and disadvantages. However, after February 24, 2022, all popular Western systems ceased their activities in our country.

As a result, domestic companies are left with several options:

• continue to use the current system without updates and technical support

• switch to the Russian analogue

• buy BI from friendly countries (for example, from China) or through a friendly country

• choose an open-source solution

As a result, the average cost of a BI tool per user has increased.

I spoke with 5 CIOs of companies with a turnover of more than 10 billion rubles per year, and they all confirmed that domestic BI solutions have indeed increased prices, realizing that foreign products will no longer compete with them.

Actually, that’s why we became interested in studying the issue of the cost of Russian solutions. Why did we conduct a sample study of the prices of three domestic BI products included in top 10 most popular BI systems in Russia.

Why do you need to research prices at all?

If we could just take prices from websites and vendor price lists, there would be no point in calling it research. However, as in many other B2B areas, prices are not disclosed here, and the cost is calculated for a specific customer and a specific case.

In addition, we wanted to get closer to TCO (total cost of ownership) – that is, the total cost of ownership of this product, which, of course, includes not just the license price, but also a lot of other things.

What parameters were taken into account in the calculation

A BI solution is a complex product consisting of a large number of components. Therefore, its cost is calculated according to a number of parameters.

For the purposes of our research, I highlighted:

• Price licenses (separately for advanced and business users, I’ll explain the difference below)

• Costs for infrastructure

• Price development reports

• Price technical support (vendor, as well as second and third lines)

Also, as cases for calculating the price, I took three virtual companies, differing in size and, accordingly, in the number of users.

User license cost comparison

As a rule, vendors of BI solutions in Russia divide their users into two categories: advanced and business users.

Advanced or professional user has more features, for example, it can customize reports independently. As a rule, such licenses are purchased for business analysts, data scientists and other technically advanced users who will maintain the solution.

Business user – these are managers or employees who do not know how to write SQL queries and set up dashboards. Their authority is sufficient to find the necessary parameters among already developed reports and dashboards.

In the table I showed the cost of a monthly license for 3 vendors and for these two categories of users.

Based on the data obtained, I calculated average license cost per user per month:

To calculate the total cost of purchasing a BI system, I needed to make a number of assumptions. Which ones exactly – read on.

Assumptions required to calculate the price

Number of reports per user

In this case, I mean exactly the number of reports developed by specialists, and not the number of reports requested by end users. This value is necessary to calculate the cost of developing reports.

In my experience in implementing BI solutions, in large companies, on average, there is one report for every 20 business users, and in small companies, the number of developed reports is even greater than the number of users.

Therefore, for a smaller case, I took the number of reports equal to 25, and for larger ones, I divided the number of users by 20.

Report development cost

On average, I estimated the labor costs for developing one report, taking into account testing, but without preparing showcases and data storage, at 5 man-days. The average rate for BI consulting on the market is 27,000 rubles per person-day.

If reports will be developed by your full-time specialists, then you need to take into account their salaries, as well as the increase in the team for the project and the fact that later, after implementation, all these specialists will be underworked, since only support will be needed.

If you sum up all the costs per employee (salary, workplace, voluntary health insurance, vacations, sick leave and other overheads), you will get about 10-15% less than hiring an integrator. But there will be added hassle to keep the team occupied during idle moments.

Infrastructure cost

In my experience, the cost of infrastructure is about 500 rubles per month per user when installed on client servers (on-premises). Here I considered exactly this installation option, since in Russia it is more popular than cloud deployment.

Support cost

As for technical support, it consists of three parts:

• technical support from the vendor

• second line, the number of people on which depends directly on the number of users

• third line, the costs of which depend on the number and complexity of the reports developed

Technical support from the vendor is usually paid at 20% of the cost of a permanent license.

For the second line in companies with thousands of employees and an acceptable SLA, one specialist per thousand users is usually needed.

And for the third line – approximately one specialist per 75 developed reports.

The cost of specialists, taking into account salaries, taxes and maintenance, will be 200 thousand rubles. for a second-line specialist and 300 thousand rubles. for a third line specialist. These are gross amounts per month.

Calculation horizon

The calculations are based on what expenses the company will incur in the next three years after purchasing the BI system. This helps demonstrate that BI implementation requires a significant infusion of cash over its lifespan, as well as reflecting any hidden costs.

Calculation of the cost of a BI solution for 3 vendors using the example of 3 cases

In order to make the calculation as close to reality as possible, we looked at three cases of companies of different sizes.

For ease of understanding, we calculated the cost perpetual licenses.

In the table below I described company cases without going into details. At this stage, what is important to us is the number of users and their division into categories, which I wrote about above, as well as the number of reports.

Next, I will calculate the approximate budget for connecting employees to the BI system. I will proceed from the average cost of a license for one business user of 1,573 rubles. per month and one advanced user RUB 5,176. per month (I wrote about these prices above).

Plus, I’ll take into account the costs from the block of assumptions:

• cost of report development

• infrastructure spending

• technical support costs

How much does a domestic BI solution actually cost?

Costs that many people don't know about

From the presented calculations it is clear that the cost of BI licenses is just the tip of the iceberg, comprising:

• 17% of total costs for 80 users

• 33% of total costs for 500 users

• 40% of total costs for 2500 users

The company bears most of the costs when developing reports, preparing and maintaining infrastructure, as well as paying for technical support at various levels.

So, costs without the cost of BI licenses will be:

• 83% of total costs for 80 users

• 67% of total costs for 500 users

• 60% of total costs for 2500 users

Calculations clearly demonstrate that deploying a domestic BI tool even for 80 users is an expensive pleasure. And in the case where a company has thousands of BI users, costs can amount to hundreds of millions of rubles.

Disclaimer

Based on the experience of our team, which has been working on data projects of various levels of complexity since 2012, the above calculations correspond to the current realities of the Russian BI market.

However, the calculations in the article still have a number of limitations:

• The option of developing open-source BI solutions on our own was not considered. If such a solution is implemented, the costs will not be spent on purchasing licenses, but on developing reports on your own.

• The costs of a corporate data warehouse (CDW) were not taken into account, since the costs were calculated exclusively for the implementation of BI.

• Deployment of a BI system in the cloud was not taken into account, which significantly increases infrastructure costs.

• User training costs are not taken into account. They are individual and depend on the level of data culture in the company.

• The purchase of an annual subscription to the BI system was not considered. However, this option is not very popular among companies in Russia. The vast majority tries to purchase a permanent license and not depend on the vendor in the future.

• Vendors almost always give good discounts and are flexible when working with large businesses – companies with thousands of BI users. Consequently, when it comes to spending hundreds of millions to purchase BI licenses, suppliers approach each client individually.

Conclusion

When choosing a BI solution, it is necessary to take into account that the user hierarchy is strongly influenced by the data culture in a particular company, as well as the fact that the functionality of each BI is unique. It is important to understand who the end users of BI will be and understand the goals of implementation – to improve the data culture throughout the company or to provide your analysts with a convenient BI interface.

From experience communicating with customers, we know that most business users rarely or never access the BI system. Therefore, for such companies, for which it is important to improve the culture of data and make it more accessible to managers and employees, we have developed an alternative solution.

Easy Report is a self-service reporting tool in the messenger. Artificial intelligence helps the system understand the user’s request, given in ordinary Russian, with errors, using slang, and take the necessary data directly from the sources. He sends them to the selected messenger in the form of graphs, tables, interactive diagrams, etc. More about the service – in our Telegram channel.

We wrote about how Easy Report allows you to save on the cost of implementing BI systems and licenses here in this article.