Five Analytics Predictions for 2011

In 2011 analytics will take center stage as a key trend because companies are at a tipping point with the volume of data they have and their urgent need to do something about it. So, with 2010 now past and 2011 to look forward to, I wanted to take the opportunity to submit my predictions (no pun intended) regarding the analytics and advanced analytics market.

Advanced Analytics gains more steam. Advanced Analytics was hot last year and will remain so in 2011. Growth will come from at least three different sources. First, advanced analytics will increase its footprint in large enterprises. A number of predictive and advanced analytics vendors tried to make their tools easier to use in 2009-2010. In 2011 expect new users in companies already deploying the technology to come on board. Second, more companies will begin to purchase the technology because they see it as a way to increase top line revenue while gaining deeper insights about their customers. Finally, small and mid sized companies will get into the act, looking for lower cost and user -friendly tools.
Social Media Monitoring Shake Out. The social media monitoring and analysis market is one crowded and confused space, with close to 200 vendors competing across no cost, low cost, and enterprise-cost solution classes. Expect 2011 to be a year of folding and consolidation with at least a third of these companies tanking. Before this happens, expect new entrants to the market for low cost social media monitoring platforms and everyone screaming for attention.
Discovery Rules. Text Analytics will become a main stream technology as more companies begin to finally understand the difference between simply searching information and actually discovering insight. Part of this will be due to the impact of social media monitoring services that utilize text analytics to discover, rather than simply search social media to find topics and patterns in unstructured data. However, innovative companies will continue to build text analytics solutions to do more than just analyze social media.
Sentiment Analysis is Supplanted by other Measures. Building on prediction #3, by the end of 2011 sentiment analysis won’t be the be all and end all of social media monitoring. Yes, it is important, but the reality is that most low cost social media monitoring vendors don’t do it well. They may tell you that they get 75-80% accuracy, but it ain’t so. In fact, it is probably more like 30-40%. After many users have gotten burned by not questioning sentiment scores, they will begin to look for other meaningful measures.
Data in the cloud continues to expand as well as BI SaaS. Expect there to still be a lot of discussion around data in the cloud. However, business analytics vendors will continue to launch SaaS BI solutions and companies will continue to buy the solutions, especially small and mid sized companies that find the SaaS model a good alternative to some pricey enterprise solutions. Expect to see at least ten more vendors enter the market.

On-premise becomes a new word. This last prediction is not really related to analytics (hence the 5 rather than 6 predictions), but I couldn’t resist. People will continue to use the term, “on-premise”, rather than “on-premises” when referring to cloud computing even though it is incorrect. This will continue to drive many people crazy since premise means “a proposition supporting or helping to support a conclusion” (dictionary.com) rather than a singular form of premises. Those of us in the know will finally give up correcting everyone else.

My Take on the SAS Analyst Conference

I just got back from the SAS analyst event that was held in Steamboat Springs, Colorado.   It was a great meeting.  Here are some of the themes I heard over the few days I was there:

SAS is a unique place to work.

Consider the following:  SAS revenue per employee is somewhat lower than the software industry average because everyone is on the payroll.  That’s right.  Everyone from the grounds keepers to the health clinic professionals to those involved in advertising are on the SAS payroll.   The company treats its employees very well, providing fitness facilities and on site day care (also on the payroll). You don’t even have to buy your own coffee or soda! The company has found that these kinds of perks have a positive impact.  SAS announced no layoffs in 2009 and this further increased morale and productivity.  The company actually saw increased profits in 2009.   Executives from SAS also made the point that even thought they might have their own advertising, etc. they do not want to be insular.  The company knows it needs new blood and new ideas.  On that note, check out the next two themes:

Innovation is very important to SAS.

Here are some examples:

  • Dr. Goodnight gave his presentation using the latest version of the SAS BI dashboard, which looked pretty slick.
  • SAS has recently introduced some very innovative products and the trend will continue. One example is its social network analysis product that has been doing very well in the market.  The product analyzes social networks and can, for example, uncover groups of people working together to commit fraud.  This product was able to find $32M in welfare fraud in several weeks.
  • SAS continues to enhance its UI, which it has been beat up about in the past. We also got pre-briefed on some new product announcements that I can’t talk about yet, but other analysts did tweet about them at the conference.   There were a lot of tweats at this conference and they were analyzed in real time.

The partnership with Accenture is a meaningful one.

SAS execs stated that although they may not have that many partnerships, they try to make the ones they have very real.  While, on the surface, the recent announcement regarding the Accenture SAS Analytics Group might seem like a me too after IBM BAO, it is actually different.  Accenture’s goal is transform the front office, like ERP/CRM was transformed.  It wants to, “Take the what and turn it into so what and now what?” It views analytics not simply as a technology, but a new competitive management science that enables agility.  It obviously won’t market it that way as the company takes a business focus.  Look for the Accenture SAS Analytics Group to put out services such as Churn management as a service, Risk and fraud detection as a service.  They will operationalize this as part of a business process.

The Cloud!

SAS has a number of SaaS offerings in the market and will, no doubt, introduce more.  What I found refreshing was that SAS takes issues around SaaS very seriously.  You’d expect a data company to be concerned about their customers’ data and they are. 

Best line of the conference

SAS is putting a lot of effort into making its products easier to use and that is a good thing.  There are ways to get analysis to those people who aren’t that analytical.  In a discussion about the skill level required for people to use advanced analytics, however, one customer commented, “Just because you can turn on a stove doesn’t mean you know how to cook.”  More on this in another post.

SAS and the Business Analytics Innovation Centre

Last Friday, SAS announced that it was partnering with Teradata and Elder Research Inc. (a data mining consultancy) to open a Business Analytics Innovation Centre.  According to the press release,

“ Recognising the growing need and challenges businesses face driving operational analytics across enterprises, SAS and Teradata are planning to establish a centralised “think tank” where customers can discuss analytic best practices with domain and subject-matter experts, and quickly test or implement innovative models that uncover unique insights for optimising business operations.”

The center will include a lab for pilot programs, analytic workshops and proof of concept for customers.  I was excited about the announcement, because it further validated the fact that business analytics continues to gain steam in the market. I had a few questions, however, that I sent to SAS.  Here are the responses. 

Q. Is this a physical center or a virtual center?  If physical – where is it located and how will it be staffed?  If virtual, how will it be operationalized?

R. The Business Analytics Innovation Center will be based at SAS headquarters in Cary, North Carolina.  We will offer customer meetings, workshops and projects out of the Center. 

Q. Will there be consulting services around actually deploying analytics into organizations?  In other words, is it business action oriented or more research oriented?

R.  The Business Analytics Innovation Center will offer consulting services around how best to deploy analytics into organizations, as well as conduct research-based activities to help businesses improve operational efficiency. 

Q.  Should we expect to hear more announcements from SAS around business analytics, similar to what has been happening with IBM?

R.  As the leader in business analytics software and services, SAS continues to make advances in its business analytics offerings. You can expect to hear more from SAS in this area in 2010

I’m looking forward to 2010!

Security and Reliability of Data in the Cloud

Over the past few days, I got a chance to speak to two different companies in the business analytics space about data in the cloud.  One was a SaaS provider, the other an enterprise software vendor.  Two vendors, two different stories that illustrate the jury is still very much out regarding how end users feel about putting their sensitive data in the cloud.

The SaaS provider runs its operation in the Amazon EC2 cloud (and no, I do not believe that the company was using Amazon’s new Virtual Private Cloud services).  Interestingly, the company said that even organizations in the public sector were starting to get comfortable with the level of security and reliability of the cloud.  In fact, the company said that the security and reliability of a cloud data center was, more often than not, better than the security and reliability of the infrastructure on a customer’s premises.    This is an argument I have heard before.

The enterprise software vendor also provides a cloud-like option to its customers.  This company told me that 80% of its customers did not want to keep their data in a cloud environment because of security concerns.  These customers are analyzing some pretty sensitive data about customers, revenue, and the like.

Considerations

When you think about data in the cloud, it is important to think about it from at least 2 perspectives:  Yours and the cloud provider.  Let’s say you are a mid sized company running a business analytics application in the cloud.  From your perspective, the amount of data that you are storing and processing in this service may not that great.  However, your SaaS provider might have five thousand customers.  In fact, it may be running its application across many servers.  It may house your data and the 4999 other companies it calls its clients on multiple database servers.   Once your company’s data is in the SaaS provider’s database, it may exist there with data from other companies.  The concern, of course, is that your data is in a shared environment that you don’t control.   The SaaS provider will tell you that since this is their business, they have a higher level of skill around issues such as security and reliability than might exist in your own company.  And this may be true, depending on your company.  Each organization needs to evaluate its own needs and issues and make a decision for itself.

Here are some issues to consider about security and reliability:

Data Security

    o       Different kinds of data require different levels of security.  There are huge numbers of issues associated with security –including transporting the data securely to the cloud, as well as data access and data leakage .  (those interested should check out a very interesting paper that looks at potential threats from “non-provider affiliated malicious parties” by Ristenpar, Tromer, Shacham, and Savage.)

    o       Along with this are controls over your data that need to be addressed.  These include controls to ensure data integrity such as completeness, accuracy, and reasonableness?  There are processing controls to ensure that data remains accurate. And, there also need to be output controls in place. And of course, there needs to be controls over the actual transport of data from your company to the cloud.

    o       There are also data compliance issues to think about.  These might include retention as well as issues such as cross country data transfer.

    o       Data ownership – Who owns your data once it goes into the cloud?  Some service providers might want to take your data, merge it with other data and do some analysis.

    Reliability/Availability

      o       Availability:  A provider might state that its servers are available  99.999% of the time, but read the contract.  Does this uptime include scheduled maintenance?

      o       Business continuity plans.  If you cloud provider’s data center goes down, what plans are in place to get your data back up and available again.  For example, a SaaS vendor might tell you that they back up data every day, but it might take several days to get the back up onto systems in another facility.

      o       Loss of data. What provisions are in your contract if something happens and your providers loses your data?

      o       Contract termination-   How will data be returned if the contract is terminated?

      o       Vendor Lock-in – If you create applications with one cloud vendor and then decide to move to another vendor, you need to find out how difficult it will be to move your data from one to the next.

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