Understanding the Why of the Buy

What does it say about todays music when an album of previously released songs, some of which hit No. 1 nearly four decades ago, tops the charts? What does it say when the Backstreet Boys knock that album by the Beatles off its perch? I dont know, but I suppose some analytical software out there will figure out that the old dudes who love the Beatles havent figured out how Napster works and that the parents of the Backstreet buyers wont let them use it.

In any case, the recording companies generated massive sales with little or no work. This is the power of analytics, and that power is showing up in almost all front-office applications.

Analytics is the most important set of technologies ever to hit IT. Very few vendors can provide sophisticated analysis tools to help businesses understand customers. Most vendors have pushed the idea of transactional customer interaction systems, focusing on data capture, perhaps with a static report that might show a tiny part of a big trend.

There is evidence that next year will be the year of analytics: First, Microsoft sneaked a huge release of Commerce Server into beta a couple of weeks ago. This will become the companys linchpin in its B2B strategy of creating online marketplaces. Commerce Server 2000 will include, among other things, analytics, personalization and data mining, and it will be focused on the sell side of business.

Meanwhile, Delano Technologies (www.delanotech.com), a purveyor of high-end customer interaction software, recently purchased analytics company Digital Archaeology. The results of this purchase will become apparent in a few months. From my early view of the software, the integration looks good, and this should be a powerful offering.

Analytics powerhouse SAS has its own agenda for coupling CRM with analytics. Look for SAS to be a big contender in this market.

But there are still obstacles. Data mining technologies have existed for a long time, but its been difficult to broadly prove their worth. The people who look at the end analysis simply cant interpret the results correctly, and there are so many variables to the way customers operate that trend analysis may be impossible. After all, how can millions of intelligent people purchase a CD by the Backstreet Boys? We may never know.