IBM is taking its analytics proposition to the midmarket through a series of industry-specific, cloud-based offerings.
Midmarket companies have historically not had much interest in advanced analytics, as they generally lack the budget and the skills to make anything out of sophisticated, enterprise-grade tools. But IBM believes that there is a market for relatively simple, service-based offerings that address very specific data challenges that these organizations face.
At an event in Madrid this week, PAC heard how IBM is currently planning four such offerings, under the banner of “Analytics Answers”, based on the SPSS stack. These focus on the following areas: insurance renewals; student performance; retail sales analysis; and debt collections. Launch is planned in early 2013.
The areas have been chosen for a number of reasons. Firstly, the organisations facing these challenges all sit in the midmarket space (although clearly there are bigger insurance and retail companies whose needs are addressed by IBM’s traditional analytics product set). Secondly, the business challenges that they address involve non-time sensitive batch workloads, which means that analytics tools do not need to be embedded into complex, real-time systems.
For example, the debt collection proposition is designed to help companies group customers by their profile, location, the type of products that they buy etc, and enable them to prioritize the focus of their collections process in order to get the greatest return in the shortest time. If 60% of outstanding debt lies with only 20% of the sample base, then these are the folks that need to be contacted first.
So how does it work? Well, IBM engages with the client to understand their requirements, take an historic data extract and match it to an appropriate analytics template. Once the two sides have tweaked the template to ensure it can work with the client’s existing data fields, and agreed on the questions that are going to be asked, the data extract is run through a web-based SPSS tool (hosted on IBM’ SmartCloud Enterprise platform). Crucially, the client does not require any internal skills to handle the technology.
The results of the queries are then downloaded by the client into a free ‘Personal’ version of its Cognos tool (a positive step from a vendor which has not historically engaged with clients in this way), from which the client can generate any number of charts and graphs to present their findings.
For buyers, the value that these services can deliver will depend greatly on whether the data that they run through the service is sufficiently clean in the first place. If you insert rubbish into one end of the machine, you’ll just get rubbish out the other end. However, the lack of upfront costs and subscription pricing model will appeal.
For IBM, the success of these offerings will depend partly on the price point (which it insists will be at a mid-market friendly, annual subscription rate) and partly on its market reach. It also needs to streamline the process of getting clients set up on the service and ensure that its templates cover as much common ground between clients as possible, in order to deliver a decent margin. IBM may also run into some niche competitors in some areas, which are much more adept at developing and selling midmarket-friendly propositions.
IBM plans to aggressively use its channel to push these offerings to midmarket clients, which makes sense given that it has little direct presence or influence in smaller accounts. However, it will need to support the partners to make sure that they are engaging at the right level. It is more likely to be a business unit lead or marketing principal that ‘gets’ what IBM proposing, rather than the head of IT.