When elasticity is the name of the game, no other software delivery models rival the power of the cloud. Wanting the ability to spin up or down its computing capacity, behavioral analytics company Quantivo announced a move to the Amazon Elastic Compute Cloud (Amazon EC2).
For Quantivo, the key benefits include reducing costs from a delivery standpoint, speed to deployment for users, and having the flexibility to analyze large amounts of data. Brian Kelly, Quantivo's chief executive officer, says that especially for its customers with event driven spikes in Web site traffic, the ability to be infinitely scalable is paramount.
"I'm seeing a lot of companies building on the Amazon cloud," says Gartner analyst Bill Gassman. "It's a big trend and a good trend." The analyst notes that the move to the cloud is a smart and inexpensive way for Quantivo to get a lot of resources without having to build a data center. Plus, the quick scalability and service-level agreements are also there. He says that particularly in Quantivo's target verticals -- retail and online media companies -- there are usually business patterns in which large numbers of customers come and go. Being able to spin up computing power when an e-commerce site experiences enormous traffic during the holiday season is a huge advantage. Due to the fact that Quantivo is also reducing its operating costs, it can save customers money by providing cheaper subscriptions.
"For our customers the Amazon stuff is transparent. They know about it, but they don't interact ... with Amazon," Kelly explains. Customers send Quantivo their online customer data, which Quantivo takes, gets it loaded and ready -- usually in about 10 days -- before sending it back. The customer is then able to query and run analysis on that data. Quantivo charges customers for the amount of data they host. Kelly shares that at this point, he has customers paying $5,000 a month and also ones paying $40,000 a month for a vast quantity of records. Customers pay for the data they use, though. So, the costs could be variable based on, for example, seasonal usage. Kelly says that saving customers up-front hardware costs is another huge benefit. "Putting [our services] on the cloud makes it easy to get a leg up," he says. "You can believe our PowerPoint presentations or you can give this a try, and it's really easy to do that. You can load up your customer data, kick the tires, and realize the value of the application very quickly."
Gassman says competitively speaking, the cost savings should be a nice factor. However, he notes, down the road more vendors will be moving to the cloud and competitive differentiators will shift elsewhere. "The competitive factors are not only the cloud itself, which gets the cost down, but there's always going to be ... the cloud ecosystem and who are the other vendors in the cloud you can work with," he says. "That ecosystem is going to be a competitive force." Gassman notes that he isn't seeing many vendors taking advantage of the ecosystem environment quite yet. Companies are mostly using the cloud for the computing capacity.
The next step for Quantivo, Gassman says, is going to be what people actually do with the product. Are users able to do more with the data now that they can scale operations and access more consumer information? The analyst says that what Quantivo offers -- behavioral targeting -- isn't unique to the company. Other vendors such as Coremetrics and Webtrends are able to do the same things -- giving users of a Web site appropriate information at appropriate times. Quantivo could stand to move beyond the "indentifying relationships" aspect and into the "putting the right content on the page." He also points out that Quantivo's offering is geared toward sophisticated business analysts, and as such, the table-and-text-driven interface isn't very visual.
"The product ... will be made available at lower prices and to more people, but that doesn't address the question, 'Do we have the skilled people to use the product?' and 'Do we have the processes in place to take new insight and implement into the marketing environment?'" Gassman says. "That's a huge bottleneck for people."
Gassman says that he is seeing an adoption rate between 7 percent to 10 percent for behavior targeting solutions such as Quantivo's. However, he says that Quantivo lowering the bar to entry will increase that a bit -- maybe up to 15 percent. In other words, the market is growing -- just very slowly. Regardless, there's a big opportunity for Quantivo. "This is a real year for them to prove themselves," Gassman says.
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