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Last week I attended salesforce.com’s Dreamforce user conference in San Francisco (Twitter #DF10). As a user of salesforce applications for the last four years in my previous positions, I was familiar with its analytic capabilities, or lack thereof. Certainly you can accomplish simple reporting and produce dashboards displaying salesforce data, which is adequate for narrowly focused reporting and analysis. However, as a user I was underwhelmed. For example, there are no built-in capabilities for pixel-perfect reporting, drill-and-pivot navigation of data, advanced visualization or predictive analytics. But if you need to perform serious what-if analysis or predictive analytics against your sales and marketing data, you’ll have to do some custom programming at least to make it work in salesforce. Given the overall importance of business intelligence, I was expecting to hear more at Dreamforce about new analytics capabilities for specific lines of business.

Alas, it was not to be. The company did announce some new collaboration capabilities based on Chatter that my colleague has assessed that will enable users to embed dashboard display objects such as graphs into Chatter collaboration streams. As the data changes the Chatter stream will be updated to alert users that new information is available. Salesforce.com has also invested in linking Chatter to Microsoft Outlook (on Windows systems only initially). Users will appreciate these enhancements that bring BI to them, as I suggested rather than forcing them to come to the BI environment.

Fortunately, salesforce has fostered an active third-party community via AppExchange and Force.com. AppExchange is an online marketplace for cloud computing applications, and Force.com is a development platform for building cloud-based applications using the salesforce architecture.

Third-party ISVs have stepped in to fill the analytics void left by salesforce, and some of them were exhibiting their latest capabilities at Dreamforce. Information Builders, IBM Cognos and QlikTech were all present at the conference. Of these three, Information Builders seems to have embraced Salesforce Chatter most fully, integrating its iWay CEP enable with Salesforce Chatter (See:“iWay Software Connects Salesforce Chatter to the Enterprise”. QlikView and IBM Cognos are focused more on delivering their traditional BI capabilities against salesforce data. In fact, the IBM Cognos booth contained only generic BI messaging and was not at all specific to salesforce that I could see. There were no signs of SAP with Business Objects or its new cloud offering, nor of Oracle’s business intelligence nor MicroStrategy, all of which focus on customers purchasing licenses of their software rather than renting it.

Another interesting category is the “pure cloud” BI vendors including BIRST, Gooddata and Pivotlink. With a potential audience of tens of thousands of cloud users and such a gaping hole in salesforce’s current analytics capabilities, it was no surprise to see these vendors embracing Dreamforce. I’m sure they would cringe to hear me say it, but in the larger context of the overall BI market these three vendors are more similar than different. They all offer a broad set of traditional BI capabilities with their primary differentiator (compared to the rest of the market) being the fact that they offer their products primarily or only via the cloud. They should not downplay the importance of this differentiator. Our BI and Performance Management research shows cloud-based and hosted deployments gaining in popularity with the portion of organizations using off-premises solutions rising to 44 percent in the next 24 months.

In addition to traditional BI platform vendors and cloud-based BI vendors, analytical application vendors are also filling some of the void left by salesforce. Companies such as Merced Systems offer sales performance management and customer service or agent performance management, helping to bridge the gap between the two. My colleague recently wrote about some of their capabilities  (See: “Merced Systems Customer Summit Advances Sales and Customer Service Organizations”. Cloud9 Analytics also fills some of the void with an application focused on forward looking analyses involved in sales forecasting pipeline management and into the front office needs that we have assessed.

I did hear occasional mentions of future analytics capabilities from salesforce.com personnel, and I expect at some point in the future the company might become more focused on analytics. In the meantime, while the clouds are parted with respect to analytics, it is important to look to the third-party community to fill the void. You have options with traditional BI platform vendors, cloud-based BI vendors and analytic application vendors to deliver the BI and performance management support your business users need to drive your organization forward.

Let me know your thoughts or come and collaborate with me on  Facebook, LinkedIn and  Twitter .

Regards,

David Menninger – VP & Research Director

Talend, a vendor of open source data integration tools, recently announced its acquisition of Sopera, an open source application integration company whose products are based on a service-oriented architecture (SOA). It simultaneously announced an additional $34 million of funding. As I pondered what the announcements mean, I couldn’t help but think of the bigger picture. Is this entrepreneurial action typical of an open source vendor?

That begs the question of how an open source software vendor is supposed to act. Yves de Montcheuil, Talend’s VP of marketing, is certainly speaking a lot of “French” in a recent blog post aggressively defending open source companies and his in particular. Talend does provide an open source version of its technology and has developed a community of participants who work with and presumably contribute to the open source code base. And like many other open source vendors Talend uses a “freemium” model in which the base product is available in a free, open source version, but certain premium features are only available if you purchase a license or subscription for them.

Fundamentally, open source is one among several business models for the software industry. The appeal of the open source model is the potential to grow market share more quickly than with an enterprise software model. (I’ll use this term to distinguish traditional, “proprietary” licensed software vendors from open source vendors.)  By giving the software away you can attract more users to the product in the hope that some of those users will convert to paying customers before your company runs out of cash. It’s a balancing act to give away software with enough value to attract a significant community of users while also creating additional features and services that generate enough revenue to cover the entire costs of the organization. In fact it’s such a tough act that many open source companies struggle to stay alive.

This is where the announcements indicate Talend is not behaving like an open source software company, seeming to have reached a tipping point that many open source companies never reach. It is competitive enough in its market space to be able to make bold and aggressive moves such as acquiring another company. Its investors were confident enough to support the move and add $34 million to the coffers. These steps are foreign to many in the open source community.

Let’s look at that acquisition. Talend developed a portfolio of information management capabilities that includes data integration in the form of extraction, transformation and loading (ETL), data quality and master data management. Sopera adds SOA-based application integration capabilities as well as a services team. Service-oriented capabilities are particularly important when integrating cloud-based applications with on-premises applications or with other cloud-based applications. From a business perspective this gives Talend another item to add to its price list, and since Talend’s distribution and presence are much larger than Sopera’s that should help the bottom line. If you are an IT organization considering Talend, the broader capabilities could be a plus even if you don’t plan to use them initially.

While the acquisition is impressive from a business perspective, it’s not exactly innovative from a technology perspective. Open source vendors generally follow the lead of enterprise software vendors in competing primarily on price or total cost of ownership (TCO) rather than on head-to-head comparisons of features. Enterprise software vendors such as IBM, Informatica and SAP have a similar or broader suite of capabilities including application integration. But our research on information management shows the importance of managing costs to help drive return on investment (ROI), and enterprises have rewarded innovations in the form of a business model that reduces costs.

My conclusion is that Talend both is and isn’t acting like an open source vendor. It has used the open source business model to its advantage and now appears to be in a position to act more like an enterprise software company. Regardless of what the business model is, the new capabilities and new funding should make Talend products more attractive to enterprise IT organizations.

Let me know your thoughts or come and collaborate with me on  Facebook, LinkedIn and  Twitter.

Regards,

David Menninger

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