Hi Matt,
yes, right now IOMS only works for MS SharePoint on-prem. As Maheshwar said SharePointOnline is currently on the roadmap, but not yet available.
Going with PowerBI or Layer2 is certainly an option. Depending on your scenario you might also be able to "just" expose your existing BO reports in a secure way to Office 365 and from there integrate them via an iFrame in SharePoint Online.
Regards,
Holger.