Thursday, July 03, 2008

LucidEra Takes a Shot at On-Demand Analytics

Back in March, I wrote a fairly dismissive post about on-demand business intelligence systems. My basic objection was that the hardest part of building a business intelligence system is integrating the source data, and being on-demand doesn’t make that any easier. I still think that’s the case, but did revisit the topic recently in a conversation with Ken Rudin, CEO of on-demand business analytics vendor Lucid Era.

Rudin, who has plenty of experience with both on-demand and analytics from working at, Siebel, and Oracle, saw not one but two obstacles to business intelligence: integration and customization. He described LucidEra’s approach as not so much solving those problems as side-stepping them.

The key to this approach is (drum roll…) applications. Although LucidEra has built a platform that supports generic on-demand business intelligence, it doesn’t sell the platform. Rather, it sells preconfigured applications that use the platform for specific purposes including sales pipeline analysis, order analysis, and (just released) sales lead analysis. These are supported by standard connectors to, NetSuite (where Rudin was an advisory board member) and Oracle Order Management.

Problem(s) solved, eh? Standard applications meet customer needs without custom development (at least initially). Standard connectors integrate source data without any effort at all. Add the quick deployment and scalability inherent in the on-demand approach, and, presto, instant business value.

There’s really nothing to argue with here, except to point out that applications based on ‘integrating’ data from a single source system can easily be replaced by improvements to the source system itself. LucidEra fully recognizes this risk, and has actually built its platform to import and consolidate data from multiple sources. In fact, the preconfigured applications are just a stepping stone. The company’s long-term strategy is to expose its platform so that other people can build their own applications with it. This would certainly give it a more defensible business position. Of course, it also resurrects the customization and integration issues that the application-based strategy was intended to avoid.

LucidEra would probably argue that its technology makes this customization and integration easier than with alternative solutions. My inner database geek was excited to learn that the company uses a version of the columnar database originally developed by Broadbase (later merged with Kana), which is now open source LucidDB. An open source columnar database—how cool is that?

LucidEra also uses the open source Mondrian OLAP server (part of Pentaho) and a powerful matching engine for identity resolution. These all run on a Linux grid. There is also some technology—which Rudin said was patented, although I couldn’t find any details—that allows applications to incorporate new data without customization, through propagation of metadata changes. I don’t have much of an inner metadata geek, but if I did, he would probably find that exciting too.

This all sounds technically most excellent and highly economical. Whether it significantly reduces the cost of customization and integration is another question. If it allows non-IT people to do the work, it just might. Otherwise, it’s the same old development cycle, which is no fun at all.

So, as I said at the start of all this, I’m still skeptical of on-demand business intelligence. But LucidEra itself does seem to offer good value.

My discussion with LucidEra also touched on a couple of other topics that have been on my mind for some time. I might as well put them into writing so I can freely enjoy the weekend.

- Standard vs. custom selection of marketing metrics. The question here is simply whether standard metrics make sense. Maybe it’s not a question at all: every application presents them, and every marketer asks for them, usually in terms of “best practices”. It’s only an issue because when I think about this as a consultant, and when I listen to other consultants, the answer that comes back is that metrics should be tailored to the business situation. Consider, for example, choosing Key Performance Indicators on a Balanced Scorecard. But vox populi, vox dei (irony alert!), so I suppose I’ll have to start defining a standard set of my own.

- Campaign analysis in demand generation systems. This came up in last week’s post and the subsequent comments, which I highly recommend that you read. (There may be a quiz.) The question here is whether most demand generation systems (Eloqua, Vtrenz, Marketo, Market2Lead, Manticore, etc.) import sales results from CRM systems to measure campaign effectiveness. My impression was they did, but Rudin said that LucidEra created its lead analysis system precisely because they did not. I’ve now carefully reviewed my notes on this topic, and can tell you that Marketo and Market2Lead currently have this capability, while the other vendors I’ve listed should have it before the end of the year. So things are not quite as rosy as I thought but will soon be just fine.

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