Despite IBM's dominance in the analytics space, Mark Gorenberg of Hummer Winblad Venture Partners says the analytics space is still wide open and ripe for new opportunities.
HAVEN, Conn. - IBM has dominated the analytics software space, however, a noted venture capitalist
says there is much unplowed territory in analytics, making it one of the
hottest areas in the technology market.
Smarter Education Forum
at the Yale School of Management here, Mark
Gorenberg, managing director of Hummer
Winblad Venture Partners
, said he believes analytics to be a driver for the
software industry, so much so that "two of our largest successes have been
was referring to Arbor Software and Omniture, two companies Hummer Winblad
invested in that were steeped in analytics. Arbor Software merged with Hyperion
Software to become Hyperion Solutions, which Oracle
acquired in 2007 for $3.3 billion
. And Adobe
acquired Omniture in 2009 for $1.8 billion
believe analytics is the core DNA of software," Gorenberg said.
he also noted that only about 20 percent of enterprises have been penetrated by
analytics and that consumers hardly use it at all. Yet, Gorenberg said several
trends are emerging that signal the use of analytics in new areas. For
instance, many companies are beginning to form a new position in their
organizational hierarchy known as the Chief Customer Officer, which relies on
analytics to sift through to zero in on how to best meet customer needs.
despite IBM gobbling up such a big chunk of the market via acquisitions,
analytics offers vast opportunity to entrepreneurs, Gorenberg said. In the last
five years, IBM has made 25 acquisitions in analytics, investing more than $14
Gorenberg said even though analytics is one of the hottest areas in the IT
industry now there is no reason to fear that there is a bubble on the horizon
that might burst. "Analytics have always been hot, and it's getting hotter and
hotter as there's more data to be analyzed. I don't think there's a bubble
coming because there is so much revenue to be made."
addition, Gorenberg said there are so many new areas of analytics to pursue,
such as personalization, behavioral targeting, and putting cloud, mobile or
social spins on analytics solutions.
his part, Gorenberg said in his view there are three kinds of software:
"Software that cuts costs, keeps you out of jail - or helps with compliance,
and software that helps you grow revenue. Analytics is the core of software
that helps you grow revenue. And because of the revenue it generates and the
lift we see, that means it's got legs to grow going forward. IBM is looking at
earning $16 billion from analytics by 2014."
Ashe, general manager of business analytics at IBM, said that indeed analytics
is one of four key growth areas IBM has identified in its 2015 road map and
that IBM expects to generate $20 billion in revenue from analytics by 2015.
fundamentally believe analytics have always been with us," Ashe said.
is one of those spaces where the best products get a leg up," Gorenberg said.
"It's a technology-based area. And the early win is the innovation many of
these companies do."
Gorenberg told eWEEK Hummer Winblad is currently investing in nine analytics
companies. "All of them are growing and they're all doing extremely well. In
the history of Hummer, we've made money on every analytics investment we've
of the analytics-related companies in the Hummer Winblad portfolio is Crowd
Factory, which uses analytics to measure the use of social media, Gorenberg
said. Crowd Factory delivers a Software-as-a-Service (SAAS) social media
platform to power white-label social network communities. The Crowd Factory
social media platform supports social network communities with user profiles,
blogs, comments, groups, discussions and photo albums; all completely
customizable to create the optimal customer experience.
analytics-related company in the Hummer Winblad portfolio is Baynote. Baynote
provides personalization and digital marketing optimization solutions that
power the adaptive web, an emerging standard in customer experience that is
always personal, relevant and convenient. By observing engagement patterns
among like-minded individuals to understand user intent, the Baynote Adaptive
Web Suite automatically optimizes and adapts the online experience, leading to
increased conversions, revenue and loyalty.
which specializes in analytics, also is in Hummer Winblad's camp. Karmasphere
is a Big Data intelligence software company bringing Apache Hadoop power to
developers and analysts. Karmasphere enables companies to unlock the
competitive advantages within their large datasets by providing an easy-to-use
family of desktop-based software. Karmasphere's products, built around the
Karmasphere Application Framework, feature independence across any Hadoop
environment, easy one-click deployment across any cloud/cluster, and a rich and
friendly user-interface to maximize productivity, discovery and insight.
two other of the nine analytics-related companies under Hummer Winblad's realm
are Ace Metrix and SignalDemand. Ace Metrix delivers in market, on-demand
television advertising analytics. The SAAS delivers a unique approach to
measuring the creative effectiveness of in-market television advertising using
a patent-pending measurement methodology. Ace Metrix's innovative approach can
deliver analytics for breaking TV ads as well as pre-media launch ads within
SignalDemand provides producers, manufacturers, distributors and retailers
with on-demand software and services to maximize profit margins in the face of
volatile markets and increasingly complex pricing, mix and supply decisions.
Using patented, comprehensive mathematical models to process thousands of
variables, SignalDemand delivers real-time price and margin recommendations on
a continual basis.