Not Equipped to Read Big Data? These Guys Can Help
It used to be that business intelligence software tools--that, say, enable a deep dive into sales data and just about everything else in your business--were the exclusive domain of big business.
The tools, hefty software platforms that often require weeks of integration and a special department of analysts to interpret their oracular output, were expensive and also produced by big companies such as IBM and SAP. Now that's all changing. As complex software tools that help with things like customer retention and development--read Salesforce.com--have migrated to the cloud and within reach of just about every company, so too has business intelligence.
The startups behind these services promise to put complex analysis within reach of small business owners, without costing them tens thousands of dollars. They can also deliver a pretty significant competitive edge through services like predictive modeling, interactive charting and data visualization. So, if you wanted to compare your company to your biggest competitors, or develop metrics on the performance of your sales team, these kinds of services can crunch the numbers for you--without you having to hire a team of analysts.
"We have the power to run the analysis ourselves, with 400-plus actions around sales and marketing," says Fred Shilmover, founder and chief executive of InsightSquared, a business intelligence cloud services startup in Cambridge, Massachusetts. The company, founded in 2010, has about 75 employees and has closed $13.5 million in financing from Atlas Ventures and Draper Fisher Jurvetson, among others.
Smaller Firms Take Root
The market for business analytics is currently around $14 billion, according to research and advisory firm Gartner, of Stamford, Connecticut. And it's dominated by companies you'd expect: IBM, Microsoft, Oracle, SAP, and SAS Institute.
Meanwhile there's a big demand for products that can analyze large sets of data, with more than half of all business leaders saying data analysis is critical to their success, according to a recent report from Boston University.
But smaller companies like InsightSquared, competitor Microstrategy, and others are planning an end-run around the big players. Shilmover, who says his company's sweetspot is small and mid-sized businesses, can integrate his software with a company's back-end data within a day and sometimes within hours.
The cost, since it's based on software as a service rather than an ongoing software license, is pretty affordable too: between $65 and $95 per user per month, based on the number of users and complexity of the serivces you choose.
Monetate, a startup with about 200 employees based in the Philadelphia area, has used InsightSquared for about a year. The company offers software tools that help businesses craft better marketing campaigns through email, their websites and in a mobile environment.
In addition to saving about $50,000 on the business intelligence tools and services of competing products that were more cumbersome, Jonathan Hill, Monetate's director of sales operations, says InsightSquared helped the company drill down on its own sales process to identify areas that required attention.
"It's making us more intelligent in areas of strategic planning, and we're now making investments in areas that are moving the needle," Hill says.
Growth in the Cloud
The trend toward the cloud has been gaining acceptance for some time, as startup Box, founded by Inc.'s Entrepreneur of the Year Aaron Levie, can attest. In May, it snagged a pretty huge win, when General Electric said its 300,000 employees in 170 countries would start using Box's services for storage and collaboration. Meanwhile, the red-hot IPO market has looked kindly on some recent cloud-based entrants, such Zendesk, whose first-day share price jumped 50 percent.
Still, some experts suggest a pullback in technology spending is on the horizon. Drew Nordlicht, partner and managing director of investment advisory Hightower San Diego, says the tepid GDP growth in the first half of the year has already dampened IT spending by companies of all sizes.
Shilmover, who was previously an associate at Bessemer Venture Partners, isn't deterred. He says that's good for his company, whose services are based in the cloud.
"If you look at cloud penetration, it's low but growing quickly in the small and mid-sized business market," Shilmover says. "We are still seeing our numbers growing more than 100 percent year over year."