IBM-Coremetrics: Stifling Innovation

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trapped_smallADOTAS – IBM’s acquisition of Coremetrics stifles innovation in the web analytics market. Worse, other big deals are contributing to the trend, e.g., Adobe’s purchase of Omniture and ATG’s purchase of Webtrends. Okay, the ATG Webtrends deal hasn’t happened yet, but it could.

The problem is that acquired companies find it very difficult to innovate. Their attention and effort is now focused on integration with the acquiring company rather than innovation within their product lines.

That problem is then compounded by an exodus of talent. Young, energetic, entrepreneurial people don’t necessarily want to work for the acquiring company, so they leave.

The next logical innovation for Coremetrics — and Omniture, for that matter — would be a move to real-time analytics, with the aim of optimizing the experience of individual visitors and increasing conversions. Coremetrics has already made some moves to update its dashboards more frequently, but displaying data faster is only a small part of the answer.

Traditional web analytics are vendors who are still too focused on reporting. Reporting is great to tell you how many people came to the site or dropped off at a particular page, but it’s really hard to make this data actionable.

Where web analytics needs to go is to optimize the individual visitors’ journeys as they progress through a website. This requires real-time analytics that can be embedded into the conversion process, not simply real-time reporting.

However, a move to real-time analytics for Coremetrics would require a complete architecture overhaul, and IBM is unlikely to make the investment. The company just bought Coremetrics, and re-engineering a last-generation analytics architecture is a long, expensive process that wouldn’t produce results for a year or more.

Meanwhile, Google continues to advance the cause and capabilities of free analytics. Yahoo! has free analytics as well, but Google Analytics is really the 800-pound gorilla here. With base analytics increasingly becoming free, paid analytics providers face constant pressure to deliver more capabilities and functionality.

What does all this mean for users? Lower prices. Most customers that have Omniture, Coremetrics or WebTrends also have Google Analytics, which puts huge pressure on the paid vendors to differentiate and reduce prices when renewing contracts and when signing new business.

Meanwhile, customers running both WebSphere Commerce and Coremetrics can look forward to tighter product integration in lieu of lower prices.

Reprinted from SeeWhy’s Website Conversion Blog.

6 COMMENTS

  1. Hi Charles – your make a statement that “acquired companies find it very difficult to innovate” is not correct to direct at IBM. In fact the opposite is true, with examples of Cognos and FileNet both picking up new capabilities from IBM Research that it is unlikely they would have been able to do on there own.

  2. Charles, enjoyed your article. Web analytics are a critical component of something bigger. A key change we think this means for the market is a shift away from product capabilities as the differentiating factor between vendors

    Google will dominate the low end of the market; for-pay vendors will differentiate by offering specialized interfaces for their particular audience and integration into their suite. Examples are: Adobe for the creative suite, now IBM for the ecommerce platform, and Unica for marketers.

  3. Talk about loaded agenda — what a load of rubbish based on promoting SeeWhy’s vision. Adotas — love your content but vet your articles to value add authors rather than those who promote thinly veiled agendas

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