Birst tries to prove SaaS doesn’t need the cloud

Software-as-a-Service startup Birst is taking the cloud out of its business intelligence offering with a new deployment option that lets customers run the product in their own data centers. The new capability, part of the company’s Birst 5 platform, comes in the form of a virtual appliance that the company says delivers all the benefits of traditional cloud-hosted SaaS without, well, the cloud part.

The idea of locally hosted SaaS might seem like sacrilege to some — not least because the cloud delivery model is often considered a strong selling point. But Birst CEO Brad Peters takes a somewhat contrary view, telling me that “SaaS is not about the subscription model, [and] it’s not about where the bits sit.”

Rather, he said, it’s about how applications are architected, and how automated their management functions are. That’s the same argument private-cloud supporters make in the Infrastructure as a Service world.

With the Birst Appliance, he explained, customers concerned about running their BI workloads in the cloud get an application engineered just like the cloud-hosted version. That means it’s designed to scale easily on commodity hardware and automate tasks such as software updates. The allure of SaaS, Peters said, isn’t that IT doesn’t have to do anything but, rather, that it delivers a better experience. “It’s the installation, management, upgrade footprint that’s the big deal,” he said.

Another part of delivering a better experience is providing a service that’s less bloated than legacy software products, but that still delivers at least the minimum set of features needed to do actual work. Or, as Peters put it, “The benefit [of SaaS] is being able to shed the [excess] baggage.”

Customers also can choose a hybrid deployment model for Birst, in which data still resides in-house but the analytics are carried out on Birst’s cloud-based servers.

Overall, he calls Birst’s new on-premise play a result of second-mover advantage. By starting as a SaaS company, Birst was forced to rethink the way software is designed and presented to the user and to build a better type of application — regardless of where it runs.

In contrast with traditional on-premise software, Peters said SaaS providers have to operate a service under tight control and ensure a good user experience, while legacy software vendors still build software with no real insight into how it runs best.

Now, Peters says, Birst can hang with other cloud-based BI providers such as GoodData and We Are Cloud, but it’s also designed to compete in-house with legacy BI vendors such as MicroStrategy, SAP, (s sap) IBM (s s ibm) and the like. However, companies that think just running in the cloud makes a valuable offering are missing the point, he said, and would “get their clocks cleaned” by legacy BI vendors in head-to-head competition. In order to compete across deployment models, SaaS vendors have to focus on writing software that’s not just a cloud-based (possibly stripped-down) version of in-house software, but that’s actually a better product.

Whether you call it SaaS, private cloud or just a new take on legacy software, it’s tough to argue with Birst’s realization that everyone deserves the architectural benefits of cloud services even if they’re uncomfortable with the cloud part.

However, selling software is a dramatically different business than providing a cloud service, so Birst has its work cut out to get its new business right. But selling software is also potentially lucrative, which makes me wonder if we’ll see other SaaS-first companies get the stomach to make similar moves in the coming months.