Eight Levels of Analytics

Just after writing yesterday about “six degrees of separation,” I discovered this article, “Eight levels of analytics,” and so I was probably destined to write this post on 11/11. Today I also saw “‘Bessemer’s 10 Laws of Being SaaS-y’ Updated for Cloud Computing,” from Bessemer Venture Partners, and “Seven SaaS Revenue Streams” from Sixteen Ventures, both of which contain numerical titles and very interesting recommendations and analyses of SaaS revenue streams by venture capitalists. I even began this post at 11:11 and finished it at 12:22 for a total time of 1:11!

If there is a pattern in my numerology today, business intelligence (BI) software could help discover and understand it, and predict what will happen over given timeframes. The ability of BI to find patterns, answers, and forecasts for complex business problems and data sets is high on the list of CIOs today. According to this article by Birst Founder and CEO Brad Peters, companies want to increase their adoption of BI beyond executives to front-line decision-makers, and software-as-a-service (SaaS) BI is making this possible due to low cost, quick deployment, and return on investment (ROI).

Although the article is basic for BI cognoscenti, “Eight levels of analytics” by Jennifer Kavur of Computerworld Canada is based on a presentation by Jim Davis, senior vice-president and chief marketing officer of SAS Institute Inc., a leading on-premises BI software vendor. The article provides a good, quick, and simple overview of BI for those who just read that their company is planning a large rollout of SaaS BI to improve decision-making and business performance.

Below are the eight levels of analytics, according to Jim Davis. The first four are the most commonly used and they analyze past data. The second four look at the future and are the hottest areas in BI today because businesses now want more help in modeling the future.

1. Standard reports answer questions like “What happened?” and “When did it happen?”

2. Ad hoc reports answer questions like, “How many? How often? Where?”

3. Query drill-downs answer questions like, “Where exactly is the problem?” and “How do I find the answers?”

4. Alerts answer questions like, “When should I react?” and “What actions are needed now?”

5. Statistical analysis answers the questions, “Why is this happening?” and “What opportunities am I missing?”

6. Forecasting answers questions like, “What if these trends continue? How much is needed? When will it be needed?”

7. Predictive modeling tells users what will happen next and how it will affect the business.

8. Optimization answers the questions, “How do we do things better?” and “What is the best decision for a complex problem?” This includes areas such as price optimization, markdown optimization and size optimization. This isn’t just about cost-cutting and can be the difference between success and failure for an organization.

SaaS BI companies to watch as the SaaS BI market continues to grow include Birst for reporting and analytics, eiVia for forecasting and predictive modeling, Mimiran for price optimization, and mashmatrix Dashboard for enterprise data mashups, dashboards, and visualization.

It will be interesting to look back at this post on 11/11/11 and see how high the SaaS BI market has grown since 11/11/09. We can use predictive modeling to predict the SaaS BI market growth now and set an alert to remind us to run that report at 11:11 on 11/11/11.

Do you predict that your organization will have SaaS BI implemented for more decision-makers by 11:11 on 11/11/11?

The Open Cloud Manifesto

Today before a sell-out crowd of nearly 900 Utah executives at the Utah Technology Council’s (UTC) 11^th Annual Hall of Fame celebration event, Google CEO Eric Schmidt said that “cloud computing is an even bigger phenomenon than the advent of personal computing.”

Maybe he has a vested interest in that statement, but analysts also agree that cloud computing is an important strategic technology for 2010 (and beyond).

If, as Eric Schmidt said, cloud computing is an even bigger phenomenon than the advent of personal computing, and if I add that personal computing is a bigger phenomenon than the printing press, then cloud computing is the biggest phenomenon of all information and communication in history (I think we know that without the syllogism.). Do you agree?

A phenomenon of this magnitude deserves a manifesto; think of all the other phenomena that have manifestos!

Fortunately, cloud computing does have a manifesto: The Open Cloud Manifesto is dedicated to portability, interoperability, and flexibility of cloud-computing systems. It’s a very well written summary of the advantages and barriers to entry of cloud computing, and the goals and principles of an open cloud. If the world is increasingly and irreversibly online, then shouldn’t we model the ability to interoperate, change cloud providers, and share data after the open nature of the Internet itself (while continually improving security)? Many brilliant companies think so.

Here are the “Principles of an Open Cloud” from the Open Cloud Manifesto:

1. Cloud providers must work together to ensure that the challenges to cloud adoption (security, integration, portability, interoperability, governance/management, metering/monitoring) are addressed through open collaboration and the appropriate use of standards.

2. Cloud providers must not use their market position to lock customers into their particular platforms and limit their choice of providers.

3. Cloud providers must use and adopt existing standards wherever appropriate. The IT industry has invested heavily in existing standards and standards organizations; there is no need to duplicate or reinvent them.

4. When new standards (or adjustments to existing standards) are needed, we must be judicious and pragmatic to avoid creating too many standards. We must ensure that standards promote innovation and do not inhibit it.

5. Any community effort around the open cloud should be driven by customer needs, not merely the technical needs of cloud providers, and should be tested or verified against real customer requirements.

6. Cloud computing standards organizations, advocacy groups, and communities should work together and stay coordinated, making sure that efforts do not conflict or overlap.

Now that we have a new platform for computing, we can again show that technology always improves.

How would an open cloud impact your organization’s ability to innovate?

Les Paul, Cloud Computing, and IT Innovation in the Great Recession

Les Paul and one of his innovations, the Gibson Les Paul guitar

Video: Les Paul performs "Over the Rainbow"

As a guitarist, I was especially saddened by the recent death of Les Paul, one of the greatest innovators in music. Les Paul invented the solid-body electric guitar, which sustains sound longer than hollow-body guitars; multi-track recording, which allows individual parts of a composition to be recorded separately and then mixed together to produce the final recording; and delay effects, which many musicians use to enhance their sound.  The Gibson Les Paul guitar is an iconic instrument that is played in countless recordings and concerts, and one of the best-selling guitars of all time. A Gibson Les Paul was my first excellent electric guitar. Les Paul’s inspiration and influence will live on through guitarists, electronic music, recording technology, and through everyone who listens to and enjoys recorded and live music today.

Just as the loss of an innovator does not stop his influence, the stagnating economy does not stop innovation. This is shown in the just-published InformationWeek 500 report, InformationWeek’s annual ranking of the nation’s business technology leaders.

This year, more than any year since 1983, IT needed to innovate with fewer resources. The top priorities of InformationWeek 500 companies to innovate with technology include making business processes more efficient (60 percent); lowering IT or business costs (47 percent); and getting better business intelligence to more employees, more quickly (37 percent). Other innovation initiatives noted in the report include improving customer service and experience, and creating a new business model or revenue stream. Web technologies that will help InformationWeek 500 companies meet their goals for innovation include software as a service (SaaS, 61 percent); and mashups (42 percent).

This is good news for cloud computing, because cloud-computing solutions help companies deliver on initiatives such as making business processes more efficient, lowering IT or business costs, getting better business intelligence to more employees, more quickly, and creating new revenue streams. It’s especially good news because InformationWeek’s top 500 IT innovators recognize the value of cloud computing and are planning to implement cloud computing technologies such as SaaS and mashups to achieve their goals. Even better, the InformationWeek 500 report only profiles companies with more than $250 million in annual revenue, which validates enterprise adoption of cloud-computing solutions.

Independent software vendors that can help the InformationWeek 500 innovations succeed include mashmatrix, a provider of enterprise mashup software; Birst, a SaaS business intelligence solution; and BranchIt, SaaS business software for enterprise relationship management, which helps companies uncover relationships that can lead to new revenue streams and improved interaction with customers, suppliers, and other business partners.

Cloud computing itself is an innovation that is developing at the right time to help innovative companies succeed with increased efficiency, lower costs, better business intelligence, improved customer service and new revenue streams. It is an innovation that will change information technology forever, just as Les Paul did with musical technology.

What are some examples of IT innovation at your organization?