Many of you have probably already noticed this but John Lovett at JupiterResearch just released his “Web Analytics Buyer’s Guide: Assessing Vendors’ Competencies and Value” (requires registration.) Having done one of these reports myself back in the day I want to congratulate John on publishing an amazingly detailed and insightful piece of work. John has a blog post on the report that is worth reading titled “It’s not the Tools, It’s the Craftsman” which reminded me lyrics from the Phish song Bittersweet Motel:
“When the only tool you have is a hammer, everything looks like a nail, and your living at the bittersweet motel.”
Bittersweet is an apt assessment when it comes to producing this type of research as an analyst: non-vendor clients love the insights, vendors hate the comparisons, and all-in-all the results often fail to shed any truly new light on the market. John should be complimented because despite publishing two somewhat poorly-resolved constellations, his work makes a few incredibly important points about the state of the market today.
If I’m Omniture, I’m not very happy about this constellation
Despite hundreds of millions of dollars of investment — including the acquisition of three of the company’s former rivals (WebSideStory, Visual Sciences, Instadia) and the roll up of Offermatica and TouchClarity — in the large Enterprise John’s assessment has Omniture in a three-way tie for “first” with Unica and Coremetrics. Compared to my assessment in 2004 and Greg Dowling’s work in 2006 (published by David Daniels in February ’07), John’s work shows that Coremetrics and Unica are actually gaining ground on Omniture from a business value and market suitability perspective.
This is important because it reinforces both John’s central thesis and one of the most important caveats in all of web analytics: it’s not the tool that matters, it’s how you use it! Omniture’s own consultants make this point when they remind us that we need to work hard to take advantage of the systems we already have in place, and the reality of the situation is that you’re not going to be any more successful with Omniture than any other application until you invest in people, process, and technology with a realistic and well-considered business strategy.
Don’t get me wrong, I think that Omniture has brilliant technology and are in a great position in the market today — if they manage to actually integrate analytics, testing, targeting, and bid management in a truly meaningful way they will solve a bunch of real-world problems. But despite the hyperbole, hype, and braggidacio, Omniture’s competitors near universally have a similar opportunity and thusly I agree with Lovett’s asessment that there is no single market leader in web analytics today, Omniture or otherwise.
If I’m Coremetrics, I am pleased as punch!
Coremetrics is in a funny position in the web analytics market. Despite all of their competitors declaring them “done” and “yesterday’s news” they continue to rank well in both the JupiterResearch ranking and the Forrester Wave. Maybe the reason is that Coremetrics is actually still very competitive and able to provide the level of functionality and service that their clients are looking for at a competitive price. Could that be it?
In fair disclosure, I do some work from time to time for Coremetrics and I really like their team, but given their recent deployment of Coremetrics Explore and the expansion of Coremetrics Connect, I think Lovett’s work validates the observation that the only real difference between Omniture and Coremetrics is their general approach towards marketing and sales, not their technology.
Furthermore, despite having been long considered a high-end solution with a substantial price tag, Coremetrics actually takes first place for overall business value in the SMB sector beating not only Omniture but also Google Analytics and IndexTools which are free! I commented as much in the press release Coremetrics issued for this report, mostly because this type of market expansion is no mean feat given the quality of the competition. And to be fair, Lovett’s business value dimension encompasses more than just cost and includes flexibility, scalability, usability, and feature sets.
If I’m WebTrends, I’m bummed out!
Living here in Portland, Oregon I am perhaps more acutely aware of the challenges facing WebTrends. Last week they lost their CFO to another local firm, they already had to part ways with their VP of Client Services, Kory Kimball, who was only appointed in January of this year, and they are still looking for a replacement for Kathleen Brush who was brought in by Francisco Partners as an interim CMO. Now, to be fair, these staffing issues are offset by the fact that they still have some pretty bright folks on the team, guys like Barry Parshall and Aaron Gray, but leadership in this marketplace has to come from the top and right now, the top is looking kind of thin.
My advice to Dan and the Board at WebTrends is basically this: get someone who knows web analytics inside and out in a senior position ASAP and get them out there talking about the company, products, and market in general. On this point I disagree with my good friend Jeff who says that “business is business” and executives don’t necessarily have to be domain experts. When I look at the market I see folks like John Pestana from Omniture, John Squire and John Payne at Coremetrics, Akin Arikan at Unica, Dennis Mortensen at IndexTools, Brett Crosby and even the great Avinash at Google out there evangelizing for both their products and the entire field of web analytics.
Call me old school, but I think the same key insight that it’s not the technology, it’s how you use it applies everywhere. WebTrends is not going to be able to compete on a feature/function level because, according to John, the feature/function war is over and done. The competitive differentiation is going to have to come from somewhere else … and historically that “somewhere else” has been guys like John Squire, Akin, Dennis, and Brett working their butts off to help people understand that despite web analytics being hard, great gains are possible when everyone is invested in being successful.
Surprise, surprise, I was right about IndexTools
When I broke the story about Yahoo! acquiring IndexTools and pointed out that most people who have seen both applications consider IndexTools to be every bit as good as Omniture, Omniture complained. Brent Higgleke, their VP of Strategic Marketing, commented on Julien Coquet’s post about IndexTools:
“This move by Yahoo! was done to compete with Google. IndexTools does not compete “toe to toe” with Omniture. The majority of their customers are small businesses (80% of IndexTools customers are SMB according to CMS Watch.) This is great news for small businesses that use Yahoo advertising. However, mid-market and enterprise customers demand advanced functionality, deep domain expertise and specialized services.”
Sounds good Brent, except you’re basically wrong. Don’t hate me, but I’m gonna recommend that people go with Lovett’s assessment instead:
“[IndexTools] provides a profoundly capable framework for advanced analysis and offers flexible segmentation built on the premise that segment creation is best facilitated through exploration of data. Although currently available only through certified partners, the new free pricing model of IndexTools (a Yahoo! Service) makes it suitable for businesses of all sizes that seek a flexible interface and possess in-house staff looking for insights within data.”
The notion that IndexTools is somehow inappropriate for the large Enterprise, is feature poor, or is otherwise unworthy of consideration in an RFP process when available is just plain silly. John said as much in his blog post, commenting:
“It turns out that IndexTools does have nearly 80 percent of Omniture’s standard off-the-shelf functionality (77 percent to be exact).”
Now, I think we all wish that John would have published his list of “basic” and “advanced” features so we could better quantify the “missing 23%” in IndexTools. My suspicion is that the gang at Yahoo! are pretty conscious of John’s assessment and working diligently on the next generation of IndexTools, much like the gang at Google did with Google Analytics.
So I will state again, Yahoo’s acquisition of IndexTools is a long-term game changer. Yahoo! has still not given a time-line for making the application freely available to all, but an entire network of partners is already out there ramping companies up at a rumored rate of over 200 accounts per week! Obviously if Yahoo! becomes so distracted with their current business problems and never releases IndexTools then my assessment will change, but everything I hear is that my Christmas 2008 prediction is more or less correct.
Despite proclamations otherwise, people still care about data accuracy
Avinash Kaushik is perhaps most loved for his exclamation, “The data quality sucks, get over it!” which to those of us tasked with explaining the unexplainable resonates like crazy. The problem with “getting over it” is that those crazy wonks over in the business, and especially the gang in the corner offices, still want us to produce accurate reports that can be trusted over time. If you’re not sure about this, go down the hall and tell your VP that the unique visitor counts you have been reporting all year may be off by as much as 30% in either direction, you’re not sure, and see what he or she says …
Lovett’s report seems to validate that nobody is getting over it and that accuracy is still important, especially in the vendor selection process (number three factor, following “flexibity of reporting options” and “ability to service business needs”.) I do disagree somewhat with John’s assessment regarding what to do about the problem, he seems to focus on the need for annotation capabilities in the product, but at the end of the day companies deploying web analytics solutions need to have defined business processes to account for tag coverage, data filtering, cookie deletion as well as a data collection validation process that is actually followed on an ongoing basis.
The next big battle will be about data integration
This is something that John and I have discussed on-and-off for some time, the idea that data integration capabilities are key as increasingly “internet marketing” is giving way to capital M “Marketing” (and, because of this, “web analytics” is likely to give way to capital A “Analytics.”) In light of this observation, John seems to be predicting that web analytics vendors will continue to build out functionality to allow them to be more deeply integrated into the business, while at the same time the existing Enterprise analytics vendors will enter the digital market via acquisition.
I think the problem with this is that these strategies have largely been tried and, for the most part, have failed to produce expected results. John predicts that web analytics vendors will build or acquire content management and relevance engines, which we have already seen with WebSideStory’s original acquisition of Atomz which included the Atomz Publish platform (among other examples, mostly CMS vendors building out analytics capabilities but Interwoven’s acquisition of Optimost is tangentially relevant I suppose.) Same for Omniture’s acquisition of Offermatica and TouchClarity.
Now I suppose it’s too soon to say if Omniture will succeed with “Test and Target” but there is no case to be made for WebSideStory + Atomz Publish being successful. Perhaps this was a problem of execution, but I rather believe that most true Enterprise shops either A) already have CMS in place or B) are unlikely to purchase CMS from a web analytics vendor given the otherwise complicated-but-entrenched landscape. It does look like Omniture is still supporting Publish so perhaps they will get traction that WebSideStory did not. Still, I’m not going to hold my breath, especially given the recent upgrades that Lyris has launched around their Lyris HQ product and the integration of ClickTracks, mostly targeted at the same SMB market and available at a tiny fraction of the Omniture’s price.
Similarly, the big Enterprise software players have all had the opportunity to invest in web analytics for years now and none have taken the plunge. Oracle and others were widely known to be looking at the sector but the only thing that came of all that was A) Microsoft buying DeepMetrix (nee Gatineau nee AdCenter Analytics) and B) Oracle buying Moniforce which I’m not sure really counts. In the meantime, SPSS has stopped supporting NetGenesis as of February 28th of this year and only SAS and Unica are still out there looking at deeper Enterprise integrations as far as I can tell.
Now, I have my own thoughts about the future of data integration and how web analytics will be levearged in business, but hopefully you’ll come see me talk at IMC 2008 in Vancouver when I talk about “Competing on Web Analytics” and hear what I have to say in person.
What, are you still reading this post?
In summary, for the three of you still reading this exceptionally long post, I think John has written a great report on the state of the industry and the vendor landscape. Every JupiterResearch client reading this blog should read it and give John a call to discuss. Or, you could come to the X Change conference in San Francisco and talk to John in person, or you could come see both of us at Shop.ORG in September and watch us fight like cats and dogs about which one of us is right about data integration. Up to you.