After the acquisition of Visual Sciences, we all wonder how Web Analytics vendors will react. So let’s get back to the different vendors out there and try to take a look at the future.
If we take the latest Forrester Research regarding Web Analytics that Megan Burns wrote a few months ago, which you can download here at Unica’s website, we find the main Web Analytics vendors well represented. Here’s a graph that sums up Megan’s findings:
Based on this, on the leaders corner we will have after this merger: Omniture, WebTrends, Unica and Coremetrics. But other players need to be followed as ClickTracks, IndexTools, of course the free tools as Google Analytics and the coming Gatineau and let’s not forget the local players such as Nedstat (The Netherlands) or Xiti (France).
So Omniture is becoming the Web Analytics green giant, will the others be able to compete and how?
Web Analysts are somehow concerned regarding Omniture’s move and if the other players will be able to compete. Lars for example points out that only WebTrends would be able to compete, but wonders if they have what it takes.
From my humble perspective, one thing that Omniture will have to pay extra attention to is the retention of customers. Omniture has a pretty aggressive sales strategy and with the acquisitions on top, they are gaining more and more customers. It’s not the case (yet?) in Europe, but Omniture seems to be the leader in the US based on what I’ve seen and heard during the last US eMetrics Summits. I’ve also heard some growing voices complaining about how Omniture was charging and thus the big question now is “will Omniture be able to retain the customers they win?” “Will the customers remain satisfied and thus loyal in the long term?” These questions are difficult to answer at this stage, so let’s get back to the other players and see how they position themselves and what their options might be.
The Web Analytics Leaders
Let’s start with WebTrends. The daddy of Web Analytics vendors has still a big presence worldwide and has made some great improvements on their suite of products since the ownership changed to Francisco Partners. Products such as Dynamic Search, from our perspective the best Bid Management tool out there for the moment (former ClickShift) and Score are giving WebTrends some renewed competitive advantage within the August release of Marketing Lab²(aka ML²). ML² also includes Visitor Intelligence (VI), a quite powerful segmentation tool, much better than the initial release a bit more than a year ago.
Let’s also not forget that Omniture is only available in ASP mode whereas WebTrends also proposes on-premise software. This latter statement is important as we see that a certain category of clients want to have the data in-house and would never let it out of their premises. From a financial perspective, for vendors, do note that this does cut both ways as this differentiating factor does mean that native installations need to be supported world wide, which might not be ideal in a more and more competitive market. Technologies also evolve and support needs to be assured for any kind of set-up, legacy or not. Reason probably why vendors would want us to believe that OnDemand or ASP/SaaS (Software as a Service) is growing and it probably has but one needs to remain cautious about long term evolutions of such configurations.
Also as Web Analytics matures within organizations and more and more integration of data is needed, software makes more sense that ASP (Note that Visual Sciences also does software). WebTrends needs to keep this software version as I predict that in the future companies will switch from ASP models towards in house models. I strongly believe that as Web Analytics becomes more and more strategic for companies, they will start wondering why they are not the owners and controllers of the data. But if WebTrends wants really to compete with Omniture they will need to increase their marketing and sales operations and thus an IPO or some kind of strategic alliance makes sense at this stage to get the funds needed to counter Omniture. So I guess that we will see WebTrends doing something in the short term.
Another difference between Omniture and WebTrends is also regarding partnerships. At least here in Europe, WebTrends seems to rely more on local partners than Omniture that relies more in direct sales, even if they also make partnerships. While some of these WebTrends partners are historical and thus box movers, some others really know what they do and they provide a level of service and satisfaction to the end customer that a vendor can’t usually deliver. The local partners understand the culture and market in which the customer is and can provide a more holistic view of Web Analytics than just a product implementation. While Omniture has tried to solve this by establishing their ‘Best Practices’, these are mainly product implementation focused and are not (yet?) that business-oriented.
So WebTrends has got some great products and with the right funds they will be able to compete with Omniture more aggressively as the market needs more than one player. And who knows, maybe WebTrends will start a price war with Omniture that will benefit in the end customer, helping prove ROI of such investments.
Regarding Coremetrics, I have little to say as their presence in continental Europe is very limited. But I wanted to point out the level of satisfaction of their customers. As Megan points out in her report, Coremetrics has one of the best customer services. Coremetrics gives you more than just technical implementation support. As they are specialized in the retail segment,they are able to help these kinds of clients further than other vendors do. This services approach was a good move as it allows Coremetrics to have a very high loyalty from their customers. I think that Coremetrics will still be a competitor, at least in the retail industry, and maybe other industries, as the latest discussion I had with them in San Francisco they mentioned trying to enter other sectors.
Unica, which has entered the Web Analytics arena recently in comparison with the other big players has an interesting position. Unica comes from the Marketing Performance and Campaign/Marketing management industry and has thus an established base of customers that already use their ‘offline’ products. Entering the Web Analytics market was logical for them as the Internet is being used more and more in large companies. Web Analytics will play a big role in the future of Marketing Performance and thus Unica has sensed the necessity to be a player in this industry. I don’t think that Unica’s objective is to be the best Web Analytics product. Unica’s strategy is to position themselves as a great choice when the client uses their other products or needs an integrated, more holistic, approach regarding online and offline activities. It’s somehow like Visual Sciences with a more flexible database but with a not-as-sexy visualization tool. And different pricing 😉
The Contenders: Free tools, middle market solutions and local players
Then we have the other Web Analytics vendors.
Free Tools (Google Analytics & Microsoft Gatineau):
The free tools have a great future ahead of them as they provide Web Analytics for the masses. Any website owner can very easily start measuring the activity of its online activities with a Google Analytics (or Gatineau in the near future). Even some large companies are using Google Analytics nowadays. Google has showed that they can deliver great functionalities and they will continue to increase the capabilities of their product. They have for example one of the best user interfaces in the industry. Conclusion: there’s a huge market for this kind of tools and I don’t believe they’re a threat to the big players. At least for the moment but as Aurélie pointed out during the European panel session at eMetrics Stockholm, this might change if one day they decide to enter the enterprise level market.
Contenders (ClickTracks & IndexTools):
Then we have contenders such as ClickTracks and IndexTools. Regarding ClickTracks, we don’t see it that often in Europe and it’s not clear which path they will follow since they were bought out last year. At the last eMetrics in Washington for instance there was nobody from ClickTracks which was kind of odd… Since John Marshall left his position as CEO, we wondered what will happen with this product even if we think it’s a very good product, for now.
IndexTools on the other hand is an interesting product. It’s the only European WA product really active in the US and they have a very good value for money proposition. The fact that their development team is located in eastern Europe allows IndexTools to have access to developing resources at a lower cost than the big players that are mainly based in the US. This means that developing the same functionality will cost them less. Also it’s interesting to note that IndexTools is a profitable company while Omniture is still not at this stage. I’m curious to see where IndexTools will be in a few years time, but I believe that they will still be out there as one of the top 5 players that companies will consider for their RFPs.
Then we have the local players. Web Analytics solutions that mainly serve one geographic area, usually their home country. In France we have Xiti for example, in The Netherlands we have Nedstat and Moniforce, in Italy we have Imetrix… Out of all these local solutions, some of them are also present in other European countries such as Nedstat, have suffered from Google Analytics’ growth (which is translated in many languages) and they will have more and more difficulties keeping up. On the one hand the big players are rushing to implement new functionalities, to launch or to buy complementary products. On the other hand the free products will also increase their pressure as they add more and more functionalities.
So to conclude, we believe that there’s still room for vendors other than Omniture. WebTrends, Coremetrics and Unica will continue to compete with the green giant. There’s also a great future for free products as Google Analytics and Microsoft Gatineau. IndexTools has some good opportunities to survive while we have questions regarding ClickTracks and the other middle range and local vendors. Marketing and sales are very important -and Omniture has understood this well- but only time will tell whether Omniture is able to retain customers.
Other vendors also need to be taken into consideration. SAS is a good example, but we are (desperately?) waiting for their future versions to assess if they really want to be serious players in the Web Analytics industry.
What do you think? Do you agree, disagree? Please leave your constructive thoughts below this post.
Disclaimer: OX2 is partner with Omniture, WebTrends, Google Analytics and Unica. This is my personal opinion, based on public information and conversations with practitioners and other consultants.