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The Summer of Big Deals

Will These Blockbusters Affect Business Intelligence?

The summer has been a hot one, not in terms of temperature, but when measured on the acquisition thermometer. First, Oracle the sprawling database and enterprise applications company bought InQuira. Then, Google took one third of its cash and the equivalent of two years’ profit and bought Motorola Mobility. And Hewlett Packard, one of the icon’s of the Silicon Valley way, spent $10 billion on its surprise purchase of Autonomy plc.

Business intelligence, intellectual property, and information management turned up the heat for investors and those tracking active market sectors. The market interest is high and many think these deals are likely to sustain their energy. But I don’t see it that way. I think the deals are more like dumping charcoal starter on charcoal briquettes: Very dramatic at ignition but certain to cool and fade into the fabric of day-to-day activity.

Starting a charcoal fire can produce some initial pyrotechnics. These fade quickly.

As the founder of Digital Reasoning, a company focused on delivering the next-generation solution-based on entity oriented analytics, I see these deals from the perspective of working with customers to solve big data analytics challenges. First, let me give you my view of information management and traditional business analytics and then outline where I think the technology and the market are going.

Business intelligence in general and analytics particular are now verbal noise. I know that most of the professionals with whom I speak interpret the phrase “business intelligence” in terms of their own experiences in getting information to make a decision. For some, business intelligence is a report and follow up telephone conversation with a human expert. Don’t get me wrong, consultants and advisors often do great work, but my point is that the phrase “business intelligence” is anchored in a method of information analysis rooted in human behavior unchanged since our ancestors sat around the camp fire roasting meat on sticks.,

The word analytics is equally difficult to explain. For many of our clients, analytics means SAS or SPSS (both the bread and butter of traditional statistics courses and business analysts from banking to warehouse management).

One executive told me:

I know we need better business intelligence and more advanced analytics. The problem is I am not sure exactly what we need. I know that what we are doing leaves me with the feeling I have when I read a month old Time Magazine in the dentist’s office. The information is fine, but it is not always useful to what I need today.

What unifies these three information-centric deals, then, is that each firm’s technology is somewhat dated. InQuira, a vendor of natural language technology focused on customer support cost reduction, is a company formed from the stubs of Answerfriend Inc. and Electric Knowledge Inc. The two companies received a combined $9.7 million in seed money prior to the creation of InQuira. The point is that the technology, although attractive to Oracle because of its 100 customers, is getting long in the tooth. The deal was less about advanced information technology and more about having shelf space in the customer support market.

What about Motorola? The company, founded in the late 1920s, is has been in business for decades. I learned last week that the moto in Motorola referred to the company’s presence in the automobile industry of the pre-Depression 1920s. Google bought history and 19,000 patents which are a blend of old and new. Once again, the thread of the age of technology surfaces. Google bought Motorola Mobility for legal purposes in my opinion, not next generation mobile search functionality.

Autonomy is also interesting. The company got its start in the mid 1990s when Michael Lynch worked with Bayesian statistical methods applied to information analysis. The mathematical foundation of Autonomy, then, dates from the 18th century, packed up first as Cambridge Neurodynamics and then as Autonomy plc. Autonomy opened for business in 1996. What I find fascinating is that Autonomy’s business intelligence, analytics, and information management systems are like, InQuira’s, older than I previously understood.

So what?

I think that what is evident is that this high value deals are not about new or even next generation technology. The companies and their technology are anchored in the past, and the technology is, in my opinion, well behind the curve of what forward thinking companies are doing today.

That’s the business intelligence and analytics situation in a nutshell. People are assuming that their systems are state of the art. They are not. The systems and methods are often more of a marketing creation than an true innovation.

What are the characteristics of a next generation system which delivers these operations or outputs to a user:

• Near real time reports that provide predictive guidance on specific business questions, topics, or actions
• Low cost scaling to handle “big data” input flows without performance drop off
• Automated content processing which does not require a team of humans to baby sit the content processing, entity tagging, and other value added operations using sophisticated mathematical recipes.

How many companies offering business intelligence solutions ARE ABLE TO deliver on these three “outputs” or characteristics?

Based on our experience at Digital Reasoning, the answer is easy: “Not many.” We spoke with Stephen E Arnold, publisher of the widely read Beyond Search blog and expert in content processing. He told me:

We continue to review the products and services from a wide range of vendors serving both the government (classified) community and the commercial market. In our analysis of outputs, Digital Reasoning was one of a very small number of vendors able to process petascale content, identify previously unknown actions or items of interest, and tag with greater than 85 percent accuracy entities in multiple languages. Only products from companies such as i2 Ltd. in Cambridge, England, approach Digital Reasoning’s sophistication. But i2 does not compete directly with Digital Reasoning. The two methods are complementary and mutually reinforcing which gives Digital Reasoning a unique place in the next generation analytics market.

Digital Reasoning’s technology is available in Synthesys. It delivers next generation analytics plus many of the features and functions associated with mobile search, natural language processing, and black box algorithms. For example, the fully automated Synthesys system delivers contextual search, query augmentation, faceted navigation, geotagging, seamless scalability, and open integration.

The key to the Synthesys approach is our patented method for delivery entity oriented analytics. The idea is that actions through time and index space of people, places, things, and actions provide actionable insights that go “beyond” traditional business intelligence and analytics.

To see Synthesys in action, I invite you to explore our demonstration at http://goo.gl/6VsSX.

Let me answer the question, “What’s the impact of this summer’s big deals in information management?”

I think that forward looking organizations will recognize that products and services available from traditional information technology vendors is mostly about charging for services, not about next generation solutions. For organizations looking for better decision support systems, more sophisticated numerical methods, and technology that uses the cloud and smart software to reduce costs, Digital Reasoning’s solutions are ones that warrant a very close look.

Tim Estes, Founder and Chief Executive, Digital Reasoning, September 1, 2011

Sponsored by Pandia.com, publishers of Stephen E Arnold’s The New Landscape of Enterprise Search

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