Summary

On October 8, Siebel Systems announced the release of Siebel Customer Analytic Applications 7.7, a solution offering that leverages robust yet accessible predictive analytics, vertical subject matter depth, and the simultaneously announced Siebel Enterprise BI Platform 7.7. Taken together, these comprise a significant move on the part of Siebel Systems, elevating the role of Siebel Analytics as a driver of customer and enterprise insight across its entire suite of offerings. Ventana Research acknowledges the great potential this suite of applications brings to the customer intelligence market. In addition to possibly bringing to critical mass the buying market's acceptance of predictive analytics as ROI-worthy, it also represents another step toward elevating the customer as the focal point of performance management initiatives.

Assessment

With this first of the 7.7-designated releases, Siebel is shifting the customer intelligence and predictive analytics curve to a new position on the insight-usability chart. Built upon and complementing an increasingly robust Siebel Analytics platform and data mining engine, these applications strive to tackle head-on the difficult task of deploying targeted predictive models to a broad business user community without sacrificing the very value brought by the models.

Most notable among the competitive differentiators cited is an array of pre-built industry-specific customer analytics solutions, leveraging the customer analytics and predictive modeling with the vertical domain expertise Siebel has focused on for some time now. Claiming over 20 industry models, these solutions tackle fairly specific sales, service, marketing, partner, product, pricing, order, and executive analytics issues across the enterprise. For example, these solutions enable organizations to address important industry issues, such as customer value and share of requirements in financial services, fact-based selling and trade promotion performance in consumer goods, and physician and product opportunity identification in pharmaceuticals. Ventana Research's investigation and early analysis show great promise for these applications with good out-of-the-box deployment value.

Further enhancing the deployment functionality are the new Intelligent Customer Interaction Analytic Applications, a family of applications designed to simplify and streamline the task of deploying models into all core Siebel operational CRM platforms. With a series of data models, metrics, and predictive templates built around industry best practices, these applications are targeted to drive real-time intelligent customer interactions with predictive support for customer churn, attrition, or response scores, for example.

Guided Analytics is another new feature, which, much like a wizard, provides context and intelligent links to logical next analysis steps, assisting users down a suggested "path to discovery." There is also clearly differentiating capability being introduced with Siebel Mobile/Disconnected Analytic Applications. One option enables saving static HTML pages, while a more substantial option downloads an embedded data file to allow the user more robust analytics functionality on a disconnected laptop.

Even with this new functionality, Ventana Research believes that Siebel will still face challenges gaining traction with Customer Analytic Applications 7.7. The primary hurdle is establishing additional traction for the more advanced predictive customer analytic applications niche overall.

We don't argue that customer intelligence is among the fastest growing segments of the business intelligence market: Siebel Analytics is a good case in point, with tremendous revenue grown over the past two years, establishing itself as a strong product entry. However, the growth has not been nearly so remarkable for predictive analytical applications. There are obviously exceptions, in the direct marketing and financial services verticals for instance, but the wider business-driven market has balked at openly embracing or investing in the incremental value of predictive analytics, for a variety of reasons, some reflecting insufficient marginal return expected over and above current practice at many organizations. Another reason is the market stance that business value derives only from custom-built predictive analytics applications. Thus, those that do make the investment tend to choose to build a solution rather than buy one that won't match their requirements. This is another hurdle Siebel addresses head-on with its industry-focused solution set.

Ventana Research believes that, with built-in industry modules and 'everyman' predictive functionality, Siebel's new offerings advantageously leverage its customer-focused application expertise. Along with its "play the data where it lies" Siebel Analytics Server architecture, these Customer Analytic Applications deliver an analytical platform that can help organizations align IT and business customer-intelligence goals in the "Understand-Optimize-Align" processes of the Ventana Research PerformanceCycle™.

We believe that the time is right for every organization to re-examine its commitment to its customer base. A proper Performance Management driven assessment will naturally include evaluation of enabling technology. Based on your business priorities and your progress in addressing your PerformanceCycle™ requirements, customer intelligence capabilities and predictive analytical functionality will be, to varying degrees, important elements of that evaluation. If the release of Siebel Customer Analytic Applications 7.7 has any impact, it should only add to the urgency.

Market Impact

Ventana Research sees three groups of vendors likely to be impacted by the release of Siebel Customer Analytic Applications 7.7. First, there are vendors with descriptive and predictive analytical offerings designed to leverage their operational CRM platforms. Like Siebel, the leading enterprise CRM vendors all have some add-in predictive analytics capability, including PeopleSoft, Oracle, Epiphany, and SAP. With the marginal exception of Epiphany, all tend to limit the range of modeling algorithms deployable, and deployment tools are more often provided rather than there being an embedded process within the application. Hooks are provided to link a scoring model to the direct marketing application for instance, but the hard stuff is left to a programmer team.

More specialized analytical offerings, from the likes of ANGOSS, KXEN, SPSS, thinkAnalytics, and SAS, are designed to enhance operational CRM platforms, including those named above, with predictive capabilities. Many in this group of vendors are certified Siebel partners, with embedded predictive analytics solutions - they now face this soon-to-be former partner as challenger with significant market presence. Siebel's announcement will do little to defuse the debate between these data-mining purists and business practitioners with respect to the rigor of data mining and predictive analytics model building. In the short term, it will add fuel to the fire. Still, all at once, Siebel's latest entry into the predictive modeling arena both helps legitimize, and threatens to overpower, the niche.

Finally, a number of the BI vendors participate on the CRM periphery with fundamental BI capabilities for customer data and a few specialized offerings aimed at the customer intelligence or customer analytics market. Included in this group are Business Objects, Cognos, MicroStrategy, Pilot Software, and ProClarity. These offerings focus primarily on delivering descriptive analytics with a customer-centric flavor. Those tackling the more difficult predictive analytics are rare, although some do so with partners. Collectively and individually, these BI vendors are now further challenged by this release to pay more attention to the business issues that drive the use of their offerings.

Overall, Siebel Analytics has been very successful in recent years leveraging their understanding of demand chain business requirements in the context of BI functionality. Siebel has thus earned traction with line-of-business decision makers, giving it a leg up versus its competitors. Siebel can be expected to take full advantage of its domain expertise and track record of customer-focused information management with time-critical application requirements.

Recommendation

Ventana Research recommends every organization in Siebel's installed customer base, especially those with operational CRM applications currently deployed without Siebel Analytics, to explore the value proposition of this release in light of your organization's performance management requirements.

For organizations with competitive CRM applications in place, there is good reason to now consider Siebel Customer Analytic Applications 7.7 for predictive modeling and deployment.

Even if your organization feels it is fully vested in both descriptive BI platform and customer-centric predictive capability, there is little reason not to update the underlying business plan and rethink how well you are addressing the elements of PerformanceCycle in driving value to the demand chain in context of this release.