Is an Analytics Cloud for Salesforce Enough?

Earlier this month, Salesforce.com chief executive (CEO) Marc Benioff said that Salesforce is readying an “Analytics Cloud” product line that will be launched during the Dreamforce conference next month in San Francisco. The question is: Is Salesforce building a platform for others to build on, or, are they building an analytics business that will compete with their ecosystem? Is it enough?

I’m not surprised by this at all, are you? Business intelligence (BI) and analytics applications like Tableau, SAS, or SAP have been around for a long time, and the size of the industry is growing even larger, with $14.4 billion spent worldwide in 2013 according to a Forbes article. I’m happy to see that data is driving more action and that analytics will be available at a platform level, but there will clearly be winners and losers displaced by this move regardless of the intent.

All of this reminds me of the moves by Google in 2005 and their acquiring of Urchin software (what was to become Google Analytics). As the chief marketing officer (CMO) of the newly minted public company then, WebSideStory, we saw the opening to create an analytics layer in the cloud and consolidate others. We tried to buy Urchin but lost to Google, but we did acquire Visual Sciences. Ultimately we were right. Omniture bought us and Adobe rapidly acquired them. Today, there is really only one standalone Web analytics company left – Webtrends.

But that was then and this is now and it’s almost a decade later. While the pattern is the same, I don’t think the Salesforce-driven consolidation is enough, and may only serve to create potential losers in its current ecosystem. It is what we do in software – eat our children. Right? Eat or be eaten.

We Need More Than New Tools: We Need a Delightful Experience

I’ve been saying for a long time that we just don’t need another analytics tool (or platform), as we have dozens of them – mostly “shelfware,” which we’ve written about in our Convergence Analytics Report. Rather, we need applications that utilize data to create delightful user experiences, like Facebook, Pandora, or Google Now. These applications all leverage data to personalize, prompt action, and generate conversions, all while collecting more data in a closed-loop system. They understand who we are, where we are, and provide highly useful information back to us.

I visited the Salesforce app exchange to see who might be disturbed by the move and ran the list by a few friends for their opinion. The move could impact the future of a whole lot of start-ups and mature companies in the Salesforce universe, including these firms ranging from mature to well-funded start-ups: BirstC9DataHeroFliptopFuturelyticsFliptop, and 6sense.

Even companies like GoodData might be impacted, as companies that already pay for Salesforce’ sales software might not want to partner with companies like GoodData or InsightSquared, which notes it’s “the #1 Salesforce Analytics app for data-driven business executives and their teams.”

While this Salesforce move underscores the importance of analytics, after two decades in the analytics space, I’m not optimistic that they will be rapidly embraced by users, as they are too difficult to use despite vendor claims to the contrary, and it’s the reason why there is so few marketing tech applications in use within the enterprise. Users need action, not reports.

Closed-Loop Systems Required

What is needed is a closed-loop system that doesn’t require any intervention by data scientists and business analysts, and at the same time delights its users in a personal mobile-first environment with useful, actionable content.

When you look at BI applications, they are often designed to be general-purpose tools. They’re certainly not actionable tools. To create predictive insight, developer focus needs to be on solving the problem from beginning to end for a real problem – enabling a sales force for example.

The good news is there are even newer set of vendors like ClariSalesPredictDealSignal, and Datahug developing applications using predictive analytics to help users accomplish their goals and take more action as a closed-loop system, much more akin to Pandora serving personalized music for the listener, than your classic, static reporting dashboards.

If Dreamforce 2013 was all about marketing automation and capturing data across every touch point, it looks like the theme of Dreamforce 2014 will be all about turning data into insight and insight into action, and is a step in the right direction toward enabling data-driven closed-loop systems, which will be all the rage next year, at Dreamforce 2015. I hope.

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