KXEN, An Important New Asset in the Evolution of SAP Analytics

sap_logo110.pngA couple of weeks ago when I was on briefed on KXEN, the predictive analytics technology provider, I was completely unaware of the deal that was being struck behind the scenes between KXEN and the German software giant SAP, which culminated in KXEN’s acquisition by SAP. The more I think about it, the more this seems to me to be another impactful acquisition by SAP, with KXEN serving as a key driver in the success of SAP’s analytics strategy.

KXEN—Not Your Father’s Predictive Analytics Application

kxen110.pngIn a space ruled by powerful and long-time players in the market, such as IBM’s SPSS, FICO, SAS, the modern approach from TIBCO Spotfire, as well as relatively strong newcomers, such as Revolution Analytics, KXEN has evolved its products from the same roots of many new business intelligence (BI) and analytics providers in the space. That is, the central idea behind the design of KXEN’s solutions is empowering the common business user with tools that will enable him/her to perform advanced analytics operations. These easy-to-use tools are equipped with not only the necessary features, but also the necessary built-in guidance and wizardry to achieve faster, yet acceptable, analysis results with significantly less effort.

To this end, KXEN has developed the technology that is built-in within KXEN’s flagship product suite InfiniteInsight and its cloud offering platform Cloud Prediction. KXEN offers a comprehensive yet business user–oriented suite of applications to address simple as well as complex predictive analytics problems. It aims to shorten the time and burden associated with the modeling and automation aspects of developing a specific predictive analytics solution or project.

InfiniteInsight uses specific elements of other KXEN  predictive analytics offerings such as Explorer for collecting and preparing the data for analysis, and Modeler for designing specific predictive analytics solutions. With Modeler, KXEN distinguishes itself by providing a sophisticated method for facilitating model creation and automation, as it has a patented technology for enabling the assembly, pre-validation, and reliance of self-service models to achieve faster times for development and deployment.

Other interesting features that make KXEN’s InfiniteInsight a solution to consider, for those organizations with predictive analytics needs, are a set of basic but strong business-focused offers:

  • Scorer. For building in-database scoring functionality in major database platforms.

  • Factory. An innovative approach for managing models (from building, to maintaining, to refreshing).

  • Social Network Analysis. KXEN’s social analysis application for maximizing your social network analysis capabilities.

  • Recommendation. KXEN’s Recommendation offering for providing the ability to analyze information coming from Big Data sources—both structured and unstructured.

  • Genius. A KXEN solution for enabling marketing professionals to fast-build and deploy predictive models (figure 1).

Figure 1. Screenshot of KXEN Genius Application, Courtesy of KXEN.

Another facet of KXEN’s success formula has been the provider’s focused approach to catering to four main business areas: customers, risk, operations, and fraud, for which KXEN can ensure effective delivery of predictive analytics functionality. These areas are crucial to many different industries, and as such, KXEN boasts to have a large number of customers spanning many different industries, such as CBS Interactive and Vodafone in telecom and Bank of America and Bank Austria in finance, just to name a few.

So, How Does KXEN’s InfiniteInsight Fit Into SAP’s Product Stack?

SAP’s Predictive Analysis software has shown modest success since its release in November 2012. Despite being an interesting offering, the software has not had an easy time gaining entry into the predictive analytics space, as well-positioned leaders already have a big piece of the pie there.

But SAP’s Predictive Analysis has done well to establish the basis of SAP’s main strategy for its business analytics portfolio, an authentic attempt to commoditize predictive analysis within SAP’s software platform stack. KXEN offers InfiniteInsight versions for Windows 7 32 and 64 bits and, most importantly, InfiniteInsight is natively supported by HANA (figure 2).

On the other hand, SAP’s Predictive Analysis approach complements that of KXEN—combining SAP's power with KXEN's simplicity. SAP’s Predictive Analysis solution provides intuitive means for creating predictive models, with capabilities for integrating with other products from SAP’s Analytics stack such as Lumira, SAP’s modern data visualization application. So, KXEN is a perfect fit for reinforcing SAP’s existing predictive analytics stack.

Figure 2. Screenshot of SAP’s Predictive Analysis Software, Courtesy of SAP.

KXEN has also preexisting connectors to some of SAP’s main data platforms, particularly those from former Sybase, such as SAP Adaptive Server Enterprise, and also has preexisting partnerships with the German company.

Other benefits that I think SAP can expect to see from this acquisition include having a product with a proven and strong footprint in the industry—in the past, SAP has had to learn how to rapidly exploit previous acquisitions such as those of SuccessFactors.com and Ariba. More specifically, SAP will benefit from a predictive analytics offering that already has presence in the cloud.

KXEN has successfully deployed a predictive analytics platform in the cloud, Cloud Prediction platform. This multitenant-based service contains a set of packages for performing general-purpose predictive analytics operations and a series of added Salesforce apps, enabling a Salesforce user to directly connect with KXEN’s InifiniteInsight and to perform predictive analytics lead scoring and predictive retention over the Salesforce software stack.

I think that SAP will undoubtedly also see short-term benefits from the acquisition such as an immediate business and customer expansion. Over the medium and long term, I think SAP will be able to make pervasive use of the patented technology underlying KXEN’s existing software stack. I predict that we will see KXEN and SAP native predictive analytics capabilities being embedded progressively not only within SAP’s Business Analytics product, but also as platform and product enhancements in HANA, in SAP’s enterprise resource planning (ERP) systems, and in other major SAP applications.

On the customer side, SAP customers may benefit from access to these capabilities, should they need them at any point in the future. SAP will need to make a soft transition, however, so that existing KXEN customers and prospects will feel comfortable with doing business with SAP and will not opt for smaller companies, the size of KXEN, who typically have agility in business and technical support.

Final Outcome

SAP’s acquisition of KXEN will certainly boost competition for the predictive analytics market by spearheading SAP’s momentum and by adding another powerhouse to the mix. But it won’t be an easy task for SAP to get a big chunk of this market, as other important players—such as R with all its popularity and accelerated adoption—are also bringing predictive analytics to a wider number of users.

A strong trend is emerging, with an increasing number of software providers incorporating predictive analytics capabilities into their software stack. As many organizations have already deployed, used, and exploited the benefits of BI applications, some have already taken the logical next step to analyze not only past and present business events and trends, but also to use that information to anticipate future events, and thereby make better business decisions for optimal business performance.

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