Building on BI with Predictive Analytics

NASHVILLE, TENN.—According to recent studies by industry-research firms Gartner and IDC, the United States Gross Domestic Product is only estimated to grow 0.6 percent in 2008, while information-technology spending is predicted to bloom 2.3 percent—IDC's 2.3 percent is a global figure, with the U.S. coming in a bit lower; Gartner's 2.3 percent is for purely domestic spending. In either case, it's still a small figure, even in the face of the greater stagnation in the overall economy, but Gerald Cohen, founder and chief executive officer of Information Builders, sees a silver lining. During his keynote address at his company's 29th annual user conference here this week, Cohen noted that, despite gloomy forecasts, there is an important distinction to be made: The industry is growing four times the rate of the economy.

In a user survey noted by Cohen, in which respondents were asked what they most want to see from information-technology providers, nearly four-fifths of people cited "competitive pricing." Cohen went on to relay what Information Builders is doing to serve user demands and needs. "You’re probably going to say, ‘lower prices,’" Cohen said, slightly chuckling, "No. We are containing prices in an interesting way though. We are using open-source to reduce prices."

Information Builders, a business intelligence (BI) services company, provides WebFOCUS, an on-demand BI tool, as well as iWay, an enterprise application integrator. At Monday’s kickoff to the summit, the Information Builders team announced it will be expanding the WebFOCUS product, coming closer to a platform. Under the WebFOCUS umbrella, RStat, a predictive analytics product was announced.

Cohen told attendees that, when talking to customers about products, the phrase he hears most often is, "There isn’t anything I can’t do within WebFOCUS." RStat, a statistical modeling function embedded in application's Developer Studio, allows users to extract, manipulate, and transform data—and to generate predictions, values, and scores all within the WebFOCUS format.

"We see now with surveys, there is more demand with analytics," says Dan Vesset, vice president and analyst with IDC, referring to a January 2008 InfoWorld business analytics survey. "Predictive analytics is number one in a survey asking what you want out of BI." Vesset points out that predictive analytics is all about anticipating problems before they happen. He draws the example of a telecommunications company using predictive analytics to draw conclusions about when customers might be close to ending their contracts. Based on statistical findings and analysis, customer service departments will be anticipate such behavior, be alerted in real time, and from there, do whatever it takes to salvage the customer relationship.

So what about WebFOCUS is different from competitors? Cohen, in his keynote, noted that predictive analytics is not new. Vesset agrees, saying that the actual predictive analytics product is not even the most compelling factor in the Information Builders' release. "The biggest strength is in the iWay component," Vesset says, referring to the enterprise integration solution, "And in IB’s ability to pull that necessary data together. RStat by itself is not a competitive advantage. It’s an open-source tool for free." Vesset continues, "Having it with iWay on one side for the integration and WebFOCUS on the other side for presentation, I think that makes an interesting combination."

Cohen told attendees that the main differentiator from competitors, especially SAS Institute—the one Cohen obliquely referred to as "that three-letter company"—is the pricing. Because the model is open-source and embedded within WebFOCUS, the product is more cost-effective than a separate analytics tool.

"A lot of this technology has been out for decades, but it doesn’t always come together," Vesset says. "So, having it in one environment so you can deploy it easier, faster, and with less movement of data—it makes it easier to roll out and deploy."

The second announcement coming out of the Summit was a customer-win story involving a user's first operational BI system with search capabilities. The Erlanger, Ky., Police Department uses the WebFOCUS BI dashboard as an intelligent crime-fighting tool. The system combines crime data from 19 government agencies to link arrest, incident, suspect, and criminal information. An officer can access the intelligent data either in the precinct or in the squad car. Using the WebFOCUS Magnify search capability, police officers can pull out real-time records and drill down. "We are a small police department using a big-city technology," says Chief of Police Mark Fields.

Cohen stressed to the audience his pride in Information Builders’ individuality within the industry. "Megavendors have stacks of separate products and partners," Cohen told the crowd. "We are growing a substantial partner community." In fact, Cohen mentioned a lofty goal for Information Builders for the year: The company intends to create 80 new partnerships in 2008.

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