GOT DATA? SPSS WANTS TO HELP TURN IT INTO KNOWLEDGE
by Storme Street

With all the fanfare surrounding applications such as customer relationship management in recent years, companies have at their fingertips more information about their businesses than ever before. But while a mountain of data is all well and good, it becomes truly useful only if you can use it to make forecasts and head off potential problems, according to David Blyer, president of SPSS Inc's relatively new Enabling Technologies Division (ETD).

SPSS ETD sells its predictive capabilities to third-party vendors -- such as Lucent Technologies Inc. and Hyperion -- which embed them in the products they sell to end users. SPSS' purchase of Miami-based Vento Software late last year brought business intelligence software to SPSS' 30-plus years of experience with data mining.

"What customers are saying today is, 'With the economic slowdown occurring, we're not finding lots of new customers, but our customers are in very competitive environments. How do we take the information we've got and offer that business intelligence?'" Blyer said. "They can show customers how to take the information they have and find the knowledge they need."

Jon Ekoniak, a software analyst with U.S. Bancorp Piper Jaffray, said he considers analytics one of the software areas ripe for growth. "With analytics, you're leveraging all that data you have stored somewhere," he said. "You're able to deliver knowledge rather than just data. So many companies are data rich but knowledge poor."

With the addition of Vento's business intelligence capabilities, SPSS should be able to better commercialize all the tools it has had for years, Ekoniak said. Companies such as PeopleSoft Inc and SAP AG have put a lot of focus on analytics recently, but they face a challenge in pulling information from third-party systems.

"They're not as capable as an independent player like SPSS," Ekoniak said.

With SPSS ETD's products, companies can shift from looking at what historically happened to looking at what could happen, allowing them to build a plan. For example, while data alone might tell a company which customers are in danger of leaving, data plus business intelligence can tell it why they might leave. With that kind of knowledge, a company can solve issues before they become problems.

Despite being around for many years, SPSS has a visibility problem, said Erick Brethenoux, an analyst at Lazard Freres & Co. The company started as a statistical tools vendor, primarily offering regression analysis within the education system. The problem is, not enough people have noticed that it is much more than that now.

Blyer is the first to agree. "We've evolved as a company, but I don't think we've positioned ourselves," he said. "We've got some major customers out there, but we're still perceived as a statistical vendor."

And he is out to change that. "We're one of the best-kept secrets in software. When you're looked at us as a stats vendor, it's not very exciting. As an analytic solutions provider, we're making headway," Blyer said.

He emphasized that SPSS ETD is happy to not only compete with other applications companies but also work with them. "We can provide very industry-specific statistics, to provide analytics on top of other applications in the CRM space, " he said. " We are not a CRM player; we are an analytic CRM player."

He said companies such as CRM leader Siebel Systems Inc are potential partners, which would lead to royalties for SPSS. "That's our core charter: find partners that will redistribute our products," he said.

SPSS ETD targets companies in a number of vertical markets, including telecommunication billing vendors, banks, retailers and e-commerce players. Blyer said there are two focuses: big companies that don't have time to do their own analytics and are looking for partners -- companies he calls the "low-hanging fruit" -- and new players looking to compete with the old establishment.

"They have good (venture capital) money, and they have visionaries who recognize that their differentiator could be business intelligence and analytics," Blyer said of the latter group.

He admitted that the company has noticed the prevailing slowdown in spending, but said business intelligence is still considered a must-have for some customers. Those that are just looking to capture transactions and analyze them might be putting off the expense, but those that are desperate to retain customers in a competitive environment and need some predictive software are willing to spend.