Enterprises no longer make decisions by gut feel and guesswork — obtaining relevant intelligence before making critical decisions is now a pre-requisite to success. As a result, analytics has become a hot button for enterprises. In anticipation of this trend, a few years ago large enterprise software vendors led an “innovation by acquisition” spree with IBM, Oracle and SAP acquiring Cognos, Hyperion and Business Objects respectively. These acquisitions did not lead to significant change in the manner that business intelligence is delivered other than to expand portfolios.
Frustration with complexity has led Procter & Gamble CIO Filippo Passerini (along with IT leaders from Fedex and Boeing) to demand a different model for developing business software. To bolster their capabilities, P&G announced a strategic partnership with Verix Business Intelligence, a start-up technology company that delivers intelligent business alerts. This trend of enterprises to risk partnering with innovative start-ups to meet their business needs will increase if enterprise solutions do not meet their expectations.
Since legacy vendor products are difficult and expensive to implement, the market is ripe for significant disruption. The lack of skills exacerbates the problem, especially with small and medium business customers. Commodity hardware combined with open source software brings the capability to deliver innovative solutions to the market. Some companies are packaging skills with cloud-delivered solutions to deliver significant results to customers.
Strong relationships that current enterprise vendors enjoy with their customers make it difficult for disruptors to get a foothold. Customers locked-in to vendors find it very difficult to move out of existing technology platforms. Since BigData analytics is such a new field, disruptors face a different challenge: preparing customers for new technologies with low cost of entry and easy-to-use solutions. To be successful they need to help customers in one or more of the following areas:
- Collect new sources of information
- Analyze this new information in co-relation with existing data
- Deliver real-time insights in a cost effective way
Some customers are leveraging analytics to give them a huge benefit over competitors. Target uses loyalty cards to predict behavior in providing relevant coupons for their future purchases. When existing customer data is combined with social networking and sensor data, it gives retailers a powerful tool to develop real-time targeting of customers through mobile devices. Other examples of widespread use will be when innovative technology can be used to reduce customer churn, improve fraud detection and improve marketing messages based on customer intelligence.
When I attend the Strata Conference next week, I look forward to speaking with disruptive vendors who will be able to provide customers with innovative solutions.