Wednesday, November 08, 2006

What's Next for Web Analytics?

I recently heard a senior manager from one of the major Web analytics firms brag in public that specialists in Web analytics had “won” in their competition with general-purpose business intelligence vendors. This struck me as premature, to say the least. He might as well have raised a “Mission Accomplished” banner and snarled “bring ‘em on.”

The substance of the vendor’s argument was that the general-purpose vendors’ technologies cannot handle the high volume of data generated by Web logs and interactions, leading users to buy systems that are specifically designed for Web data.

I’m not so sure that conventional technologies are really incapable of supporting Web volumes, particularly since business intelligence vendors have several technologies to choose from. The growth in memory-based databases in particular seems to have removed several constraints that previously hindered business intelligence system performance.

But even if the technology premise is correct, the competitive battle is far from over. The major business intelligence vendors have the money to buy Web analytics should they need to, and a history making such acquisitions when necessary to fill out their product lines. In fact, Web analytics vendors including Sane Solutions, Urchin and ClickTracks have already been purchased, although none by business intelligence companies.

Realistically, the Web analytics vendors will face the same choice as all other specialized software developers: expand into other areas or be acquired by someone else. (Eat or be eaten.) Whatever paths they take, the race is far from over.

1 comment:

Kevin Hillstrom said...

There certainly is a shift going on, within companies. Database Marketers and Business Intelligence folks would be wise to integrate their areas with the Web Analytics folks, and provide a holistic view of customer behavior.

Hopefully, the vendor community will understand the importance of integrating what each side of the fence has to offer.