Wednesday, December 12, 2007

Advanced Analytics and Still More Reasons I Love QlikView

I’m at the National Center for Database Marketing Conference this week. NCDM is always a good place to get a feel for what’s on people’s minds.

One theme I’ve picked up is a greater interest in advanced analytics. Richard Deere of Direct Data Mining Consultants, a very experienced modeler, told me that interest in segmentation always increases during recessions, because companies are more determined to increase the return on diminished budgets. This is apparently common knowledge in the modeling community, although it was news to me. In any case, it is consistent with what I’ve been hearing from vendors both at the show and in separate conversations over the past few weeks—products for event detection, automated recommendations and contact optimization, which have existed for years but gained few users, are now showing substantial growth.

Before anyone gets too excited, let’s remember that this is off a very small base. Products that sold two installations over the past three years might have added another six in 2007. Many of these products are now offered by larger firms than before, either because the original developer was purchased by a bigger company or because a large company developed their own version. So it’s possible the growth could simply be due to better distribution and more vendor credibility, in which case it could be a one-time increase. But the vendors tell me that interest is strong across all stages of the pre-purchase pipeline, so I suspect this uptick in sales is a precursor to continued expansion.

My personal theory is that the industry has matured in the sense that there are many more people now who have been doing serious database marketing for ten or fifteen years. These people saw the benefits of advanced techniques at the handful of industry leaders early in their careers, and have now moved into senior positions at other companies where they have the experience and authority to replicate those environments.

Of course, other reasons contribute as well: much of the infrastructure is finally in place (data warehouses, modeling systems, etc.); integration is getting easier due to modern technologies like J2EE and Service Oriented Architectures; vendors are becoming more willing to open up their systems through published APIs; and the analytical systems themselves are getting more powerful, more reliable, easier to use, and cheaper. Plus, as we’re all tired of hearing, customers have higher expectations for personalized treatments and competitive pressures continue to increase. I’d still argue that the presence of knowledgeable buyers is the really critical variable. I think this is an empirically testable hypothesis, but it's not worth the trouble of finding whether I’m correct.

Back to NCDM. The other major conclusion I’m taking from the show is confirmation of our recent experience at Client X Client that people are very interested in accessing their data in general, and in “marketing dashboards” in particular. There were several sessions at the show on dashboards and marketing measurement, and these seemed quite well attended. There were also a number of exhibitors with dashboard-type products, including TFC, Nicto from Integrale MDB, Tableau Software, and of course our own QlikView-based Client X Client. While there are substantial differences among the offerings, they all take the databases that people have spent years developing and make them more accessible without a lot of IT support.

This has been the problem we’ve heard about constantly: the data is there, but you need a technical person to write a SQL query, build a data cube or expose some metadata to use it, and that involves waiting on a long queue. We’ve found that QlikView addresses this directly because a business analyst can load detail data (e.g. individual transactions or accounts) and analyze it without any IT involvement (other than providing the data access in the first place). The other products listed can also access detail data, although they mostly read it from conventional relational databases, which are nowhere near as fast as QlikTech’s large-volume, in-memory data engine. (Tableau does some in-memory analysis, but only on relatively small data volumes.) It’s not that I’m trying to sell QlikTech here, but it’s important to understand that its combination of in-memory and high scalability provides capabilities these other systems cannot. (The other systems have their own strengths, so they’re not exactly direct competitors. Tableau has vastly better visualization than QlikTech, and both TFC and Integrale provide database building services that Client X Client does not.)

I’ve concluded that QlikView’s core market is the business analyst community, precisely because it empowers them to do things without waiting for IT. IT departments are less interested in the product, not because they are protecting their turf but simply because they do know how to write the SQL queries and build the cubes, so it doesn’t really let them do anything new. From the IT perspective, QlikView looks like just another tool they have to learn, which they’ll avoid if possible. You can argue (and we frequently do) that IT benefits from having business users become more self-reliant, but that hasn’t seemed to help much, perhaps because IT can’t quite believe it’s true. A more persuasive advantage for IT seems to be that they themselves can use QlikView for data exploration and prototyping, since it’s great for that kind of work (very easy, very fast, very low cost). This is a direct benefit (makes their own job easier) rather than an indirect benefit (makes someone else’s job easier), so it’s no surprise it carries more weight.

1 comment:

Dushyant said...

HI David
I have been following your blog for some time now and have alays loved it.
As to the point under discussion, I also feel that one more advantage which the IT team gets is the ability to come back quickly with corect answers to the senior management team. If they take one fourth the time to give an answer to the MD, its always better for them. more brownie points :)