Some weeks ago I posted a quick comment on Omniture going public. I didn't expect that little post to be so popular. It has become one of our top 5 posts more visited and recently a happy customer of Omniture (my supposing is based on the fact that he's an Omniture customer) has just posted a comment. John doesn't join me in my assumption that Omniture 'needs' money. This, to him does not merely justify their IPO and I agree. My reflections are today based on different facts coming from multiple sources. I wanted to share my current thoughts.
I'm not basing my assumption just on that fact, but also on the fact that they are still not making money. In 2005 alone they lost 17M$ out of the less than 43M they did on sales. If I had made this kind of results in my company I would have at least filed for Chapter 11…
I agree with you that investors are going to back Omniture in their IPO, but I have concerns regarding the distractions that an IPO might and will have on their business.
One of our clients just succeeded their IPO last year and they are still 'running' in order to comply with all the new rules and regulations. These kind of problems could distract Omniture from what I believe should be their key priority right now: R&D. A lot of things have to evolve whithin the coming years in the WA field. The vendors that will survive in the coming years will be the ones that will deliver state of the art solutions always more powerful, scalable, integratable and efficient.
Also bear in mind that Web Analytics is not a well known domain for investors and there's a little bit of 'hype' around this sector. It might be difficult for them to distinguish the leaf from the forrest and they might disenchant quickly if the results don't improve quickly. Note also that there is a difference between a stock price and the real value of a company, comments Aurélie.
Also I have some problems understanding Omniture's strategy. Let's look at some Web Analytics players strategy:
WebTrends: In 2004 with the version 7 they made a clear statement: their users needed to shift from IT towards business & marketing. Also the fact that they have a Software and OnDemand service available is very useful in many occasions. Let me give you an example one of our clients, NATO needed a WA system but it would have been unthinkable to provide them with an ASP tool, their data is strictly confidential and they will only consider software products as they want to run the operations internally. I imagine that this is also the case for other WebTrends clients US based as the US Army or the Department of State.
With version 8, WebTrends chooses the integration with on the one hand Business Objects on the 'basic' Business Intelligence with Crystal Xcelsius. For other tools they choose to provide an open Data-Warehouse allowing the seamless integration of third party data. This is a clever move as Web Analytics data needs more and more to be put into perspective with information coming from other systems. They stick themselves to their core business: Web Analytics.
WebSideStory: At WebSideStory regarding the later point I made regarding WebTrends chooses a very different approach: They choose to buy other software products and integrate their WA tool. Example: they have purchased the CMS Atomz. They also provide other 'integrated' tools as search management & bid management. Their strategy is this to provide to online marketeers the tools they need in an ASP model easing them their focus on their business. It's an interesting positioning but it has a threat as they don't remain focused on their core business: Web Analytics. They don't provide software so they won't be able to serve the privacy concerned clients. Another disadvantage we see to the ASP solution is the fact that it's more difficult to integrate WA data with other data based on an ASP model. WSS tries to counter that by providing other tools with which Web Analytics makes sense to integrate with.
Visual Sicences: now owned by WebSideStory Visual Sciences is described by analysts as 4th generation of Web Analytics. I have to recognise that I haven't seen the product so I cannot comment on this tool. I don't know of any Belgian company using VS. Are they active in Europe?
Google Analytics: their strategy could be stated with just one word: FREE. They don't have a focus on Web Analytics. Their aim is to increase their advertisement space sale thanks to metrics. By providing their customers with Web Analytics they want to increase their revenue. I think they got it right, even if they don't offer all reports offered by other top players, as there is a market for this kind of offering. Some companies are not willing to invest on Web Analytics so they address a solution to that portion of the market.
Microsoft to enter the Web Analytics Game? As they have recently bought DeepMetrix, it seems that Microsoft is getting ready to counter Google in the 'Web Analytics for Advertisers' market. They will probably follow the path of Google as they have done with MSN search. They might probably offer larger segmentation options as they posses much more information about us (product registration, Messenger, Hotmail, …) and it seems that their future AdWords-like system will be very powerful regarding segmentation.
Omniture's strategy in the other hand doesn't seem very clear (at least to me). For what I can see on the field they always present themselves by positioning against WebTrends. This can be interesting strategy for an outsider (I guess, they can be considered as outsiders in Europe as they have just opened offices in UK and France) but cannot be followed for a long time if they present themselves as market leaders. In addition I'm not sure that some European mentalities will accept a sales speech which is mostly about how bad a competitor is.
But well, maybe all this is much ado about nothing. As Avinash says Web Analytics is about people and tools only stand for 10% of the needed effort.
Some reading/information about Omnitures IPO:
- The buzz before the announcement by News.com:
- The facts by Internet Retailer & BA Venture Partners
- An analysis by Business Week:
Disclaimer: Being CEO of a Web Agency specialised in Web Analytics, I need to choose Web Analytics solutions with which I know I can build a long term business relationship. I've thus chosen WebTrends and Google Analytics for the moment. This post is thus my point of view on some of the Web Analytics players. It's my personal interpretation of the information I've gathered about them and it's of course open to discussion. Should you have a different point of view, please don't hesitate to comment, I'm not sectarian and as we say in french 'seulement les idiots ne changent pas d'avis' (only idiots don't change their mind).