By Shekhar Iyer, Global VP of Business Intelligence and Predictive Analytics, SAP
As the senior executive at SAP for Business Intelligence and Advanced Analytics, I’m especially excited about the KXEN acquisition. If you aren’t familiar with KXEN, let me give you an overview: the company’s award-winning predictive analytics platform and applications deliver an automated approach which makes it easy for users to create accurate and robust predictive models without the help of skilled data scientists. This replaces traditional, handcrafted methods which are slow, repetitive, require advanced degrees in statistics, and are prone to human error.
KXEN’s powerful predictive analytics solutions can be used to intelligently optimize the customer lifecycle – including acquisition, cross-sell, up-sell, recommendation, retention and next best activity – as well as across the business for risk, fraud and operations.
KXEN, based in San Francisco with offices in Paris and the UK, employees 56 people. Its more than 500 customers include Walmart, AAA, Bank of America, Sears, Vodafone, Lloyds TSB, Barclays, and Virgin Media. Its strong technology has great customer success especially in the financial services, telco, and retail and e-business industries. KXEN’s strong market presence aligns well with SAP’s extensive resources and global sales capabilities in 25 industries and across 12 line of business (LoB) solutions, which will make it possible for KXEN to scale even more rapidly.
Why Did SAP Buy KXEN?
SAP aims to be a leader in predictive analytics; the KXEN acquisition doubles down on our commitment to this market and complements our existing SAP predictive solutions. We’ve invested in the technology, we need to lead the market, increase our capabilities, and strengthen our credibility. With its unique approach to predictive analytics, KXEN gives us a tremendous opportunity to compete effectively with IBM and SAS, which together control 50% of a $2.2 billion market – a market that IDC forecasts will grow to more than $3 billion by 2017.
We often hear about the shortage of highly skilled data scientists and analysts to run advanced analytics. This has been one of the main reasons for the lack of more mainstream adoption. We believe this market is ready for explosive growth, especially as organizations are looking today for easy solutions to their complex “Big Data” problems.
KXEN has done an outstanding job of positioning, marketing, and selling a business-focused solution that lowers the barrier for predictive modeling, and puts advanced analytics into the hands of the business. By combining the existing advanced analytic capabilities of SAP with KXEN, we have the opportunity to democratize predictive analytics for the masses. We’re excited for this transformation.
Immediate Insights on Big Data
Businesses today are accumulating more data than ever on their website, mobile devices, etc. which can provide tremendous insights about their customers and across their business. As a leader in analytics, SAP has done a wonderful job with reporting, visualization, and dashboards. We invested in powerful predictive analytics, and are now broadening our portfolio to extend to line-of-business users who can leverage the power of our real-time SAP HANA platform. With the addition of KXEN, we’re excited to combine the powerful in-memory analytic capabilities of SAP HANA with predictive analytics to help our customers make faster, more informed decisions.
More Power for LoB Users
Another important factor for SAP when considering KXEN was the ability to embed predictive analytics into SAP business applications – including our cloud offerings like Ariba, Success Factors, and CRM as well as on-premise for financials, supply chain, etc. Now, using the SAP analytics pillars of enterprise BI, agile visualization, and advanced analytics, business users can generate information and insight any time, anywhere, on any device with more confidence.
Initial Market Reaction
The initial market reaction to the KXEN acquisition has been extremely positive, with a range of comments from industry analyst endorsing the complementary nature of the joint offering:
- Gareth Herschel and Lisa Kart from Gartner add that the “KXEN buy makes SAP a force to be reckoned with in predictive analytics.”
- Srividya Sridharan from Forrester: “SAP strengthens its access to marketing and lines-of-business users of predictive analytics by leveraging KXEN’s focus on solving for marketing problems across the customer life cycle such as acquisition, retention, cross-sell/upsell, and product recommendations.”
- Debra Osswald of IDC: “…IDC expects that it won’t be long before we hear news of new wins as a result of the pairing.”
- Madan Sheina of Ovum: “SAP’s proposed acquisition of KXEN – a predictive analytics vendor that has extensively marketed its solutions to line-of-business users, not data scientists – is a necessary competitive move and provides a promising addition to SAP’s analytics arsenal.”
- Jorge García of Technology Evaluation Centers: “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.”
- Hoger Mueller of Constellation Research says, “If you are a fan of (true) analytics, this is a great move.” Mueller goes on to note that KXEN will give SAP an end-user-friendly tool as well as some interesting packaged apps.
Positioned for Leadership
SAP can leverage our sales force to scale KXEN through brand recognition and lead generation. We plan to use our strengths around SAP HANA and analytics to further drive valuable use cases including fraud management, predictive maintenance, and customer retention – continuing to drive value for our customers.
We’re excited to work with the talented team at KXEN and to integrate their experience in advanced analytics into SAP. You can continue to expect rapid innovation and we will be providing more details in the coming months as we work through the integration and product roadmap details. Stay tuned!
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