Saturday, November 28, 2015

Model Factory from Modern Analytics Offers High Scale Predictive Modeling for Marketers

Remember when I asked two weeks ago whether predictive models are becoming a commodity? Here’s another log for that fire: Model Factory from Modern Analytics, which promises as many models as you want for a flat fee starting at $5,000 per month. You heard that right: an all-you-can eat, fixed-price buffet for predictive models. Can free toasters* and a loyalty card be far behind?

Of course, some buffets sell better food than others. So far as I can tell, the models produced by Model Factory are quite good. But buffets also imply eating more than you should. As Model Factory’s developers correctly point out, many organizations could healthily consume a nearly unlimited number of models. Model Factory is targeted at firms whose large needs can’t be met at an acceptable cost by traditional modeling technologies. So the better analogy might be Green Revolution scientists increasing food production to feed the starving masses.

In any case, the real questions are what Model Factory does and how. The "what" is pretty simple: it builds a large number of models in a fully automated fashion. The "how" is more complicated.  Model Factory starts by importing data in known structures, so users still need to set up the initial inputs and do things like associate customer identities from different systems. Modern Analytics has staff to help with that, but it can still be a substantial task. The good news is that set-up is done only when you’re defining the modeling process or adding new sources, so the manual work isn't repeated each time a model is built or records are scored. Better still, Modern Analytics has experience connecting to APIs of common data sources such as, so a new feed from a familiar source usually takes just a few hours to set up.  Model Factory stores the loaded data in its own database. This means models can use historical data without reloading all data from scratch before each update.

Once the data flow is established, users specify the file segments to model against and the types of predictions.  The predictions usually describe likelihood of actions such as purchasing a specific product but they could be something else. Again there’s some initial skilled work to define the model parameters but the process then runs automatically. During a typical run, Model Factory evaluates the input data, does data prep such as treating outliers and transforming variables, builds new models, checks each model for usable results, and scores customer records for models that pass.

The quality check is arguably the most important part of the process, because that’s what prevents Model Factory from blindly producing bad scores due to inadequate data, quality problems, or other unanticipated issues. Model Factory flags bad models – measured by traditional statistical methods like the c-score – and gives users some information their results. It’s then up to the human experts to dig further and either accept the model as is or make whatever fixes are required. Scores from passing models are pushed to client systems in files, API calls, or whatever else has been set up during implementation.

If you’ve been around the predictive modeling industry for a while, you know that automated model development has been available in different forms for long time. Indeed, Model Factory's own core engine was introduced five years ago. What made Model Factory special, then and now, is automating the end-to-end process at high scale.  How high?  There's no simple answer because the company can adjust the hardware to provide whatever performance a client requires.  In addition to hardware, performance is driven by types of models, number of records, and size of each record.  A six-processor machine working with 100,000 large records might take 2 to 40 minutes to build each model and score all records in 30 seconds per model.**

Model Factor now runs as a cloud based service, which lets users easily upgrade hardware to meet larger loads. A new interface, now in beta, lets end-users manage the modeling process and view the results.  Even with the interface, tasks such as exploring poorly performing models take serious data science skills.So it would still be wrong to think of Model Factory as a tool for the unsophisticated. Instead, consider Model Factory as a force multiplier for companies that know what they’re doing and how to do it, but can’t execute the volumes required.

Pricing for Model Factory starts at $5,000 per month for modest hardware (4 vCPU/8Gb RAM machine with 500 Gb fast storage).  Set-up tasks are covered by an implementation fee, typically around $10,000 to $20,000. Not every company will have the appetite for this sort of system, but those that do may fine Model Factory a welcome addition to their marketing technology smorgasbord.


* For the youngsters: banks used to give away free toasters to attract new customers. This was back, oh, during the 1960’s. I wasn’t there but have heard the stories.

** The exact example provided by the company was: On a 6 vCPU, 64Gb RAM machine, building 500 models on between 20K and 178K records with up to 20,000 variables per record takes an average between 2 and 40 minutes to build each model and 30 seconds per model to score all records.  This hardware configuration would cost $12,750 per month.

No comments: