What is Happening?  Saugatuck attended the PivotLink Customer & Marketing Analytic Summit last week in San Francisco. We came away from the event only further believing that an important shift is taking place in the BI industry – and, to some extent, the fast-growing Cloud BI industry segment as a whole.

PivotLink was founded initially as a general-purpose SaaS Business Intelligence (BI) player. However, over the past two years it has shifted its strategy from offering standard BI to specifically targeting the Retail market. This shift involved not only retargeting their own sales efforts around their solution, but developing significant internal expertise around the retail analytics industry. During this transition, Pivotlink also built and brought to market a specialized set of capabilities called Customer Performance METRIX that provide retail specific metrics, data visualizations, data exploration, and data ingestion solutions aimed at marketers and end users, rather than data scientists or business analysts. Along with several strategic partnerships with companies like Responsys and Datalogix, PivotLink has developed a targeted set of capabilities aimed at their chosen target market.

PivotLink’s evolution is a great example of how many BI and analytics vendors have found it tough sledding selling general-purpose Cloud BI – especially as more competitors enter the market. The rapid pace of innovation in this space, along with a well-defined set of capabilities within BI and the explosion of interest in Big Data, have pulled many providers into the market. To some extent, all of these seek to entice users away from on-premises offerings and toward the Cloud, where the rapid deployment times, agility, and ability to “fail fast” are attractive to customers not willing to bet the farm on traditional, capital-intensive IT project categories (read, "A Trillion Here, a Trillion There: How Cloud IT Enables Substantially Lower Cost of IT Failure"). For providers that intend to remain at the forefront of this market, developing a differentiated value proposition and/or market specialization, is a logical, and strategic, step.

Why is it Happening? The shift toward increased differentiation is natural for any maturing technology or service set. The more established an offering or solution becomes, the greater the expectations of buyers and users become, and the more pressure is applied to developers and providers to innovate and differentiate.

Cloud-based BI and analytics are running up against this a great deal sooner than did such SaaS stalwarts as CRM, for several reasons. First, the widespread availability of large-scale, more-affordable, Cloud-based storage and processing resources critical to BI and analytics has helped the provision and adoption of Cloud BI and analytics solutions grow faster than almost any previous SaaS category. This accelerates competitive needs for differentiation significantly.

At the same time, Cloud-based BI and analytics face substantial needs and challenges that require provider and solution innovation and differentiation. To deliver optimal business value, such solutions need to be integrated into business functionality and processes, creating a growing need for more-specialized solutions and services. A general lack of user enterprise expertise in BI capable of handling massive data and tools adds to the need for more solution/vendor capabilities and differentiation. Additionally, the traditional paradigm of sequestered analysts providing their reports to different business units is less attractive to organizations that need to react faster to incoming data within real-time LOB operations.

For an extended version of this Research Alert, visit Saugatuck Technology.

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