As the senior executive for SAP 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 predictive analytic tools and applications make it easy for users to create accurate and robust predictive models without the help of skilled data scientists. This replaces a manual model-creation process that was slow, repetitive, required special skills, and was prone to human error.
KXEN’s powerful predictive analytics can be used to help intelligently cross sell and upsell customers, reduce risk and prevent fraud, recommend products, optimize keyword bidding, execute viral marketing using social network analysis, and design better product features based on customer usage.
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 industries. SAP’s extensive resources and global sales capabilities in 25 industries and across 12 line of business (LoB) solutions will make it possible for KXEN to scale much 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 fourth-ranked market share, KXEN gives us a unique 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 reduces reliance on such workers, lowers the barrier for predictive modeling, and puts advanced analytics into the hands of business users needing to solve common predictive problems. By combining the existing SAP predictive solutions with KXEN solutions, we are democratizing the application of predictive solutions for the masses. This is the key differentiator that SAP brings to our customers.
More Power for LoB Users
As a BI leader, 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 them to line-of-business users who can leverage the power of our real-time SAP HANA platform.
Another important factor for SAP when considering KXEN was the ability to embed predictive analytics into SAP business applications – like cloud offerings such as Ariba, Success Factors, and CRM and on-premise solutions such as financial, 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 most analysts seeing it as a strong complementary offering. 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. Gareth Herschel and Lisa Kart from Gartner add that the “KXEN buy makes SAP a force to be reckoned with in predictive analytics.”
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.