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Blogs > MWD Advisors

IBM swoops for two customer analytics acquisitions in one week
Helena Schwenk By: Helena Schwenk, Principal Analyst, MWD Advisors
Published: 10th October 2013
This work is licensed under a Creative Commons License
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IBM stepped up its customer analytics acquisition activity last week by snapping up not one but two companies. The first of the company’s acquisitions was The Now Factory, a software company based in Dublin, Ireland, specialising in customer and network analytics for Communication Service Providers (CSPs). Next up was Xtify, a New York, US-based company that provides a cloud-based e-messaging platform enabling organisations to push out targeted mobile marketing communications. Both acquisitions have been made to support strategic initiatives for different business initiatives but nonetheless are connected by virtue of their focus on mobile and customer analytics.

Looking at the Now Factory first—it’s obviously still early days for the acquisition but it’s relatively easy to see where IBM is heading with this. For starters, this acquisition helps boost the company’s domain expertise and capabilities in the communications vertical—a key target for the company. At the time of the acquisition the Now Factory had around 40 CSP customers, but under IBM will likely increase this significantly if it benefits from Big Blue’s global scale and reach.

But secondly this acquisition is designed to help augment IBM’s Big Data and analytics platforms, specifically its data in motion story. At its core the Now Factory has a silicon-based analytics engine enabling it to connect directly to network data, ingest and analyse it, thereby giving CSP’s an insight into events such as bottlenecks, dropped calls and outages. These insights in turn can be utilised to, for instance, address service and customer experience issues related to mobile app, network or device usage. Moreover if this data is cross-correlated with customer data it can also be used to target subscribers with more relevant marketing campaigns.

The idea here is the faster a CSP can identify what’s going on in their network by analysing data in real time the better the chance of being able to optimise its performance or use the information in a way that can facilitate better servicing or targeting of customers. This real-time element means there are some commonalities with other parts of IBM’s big data stack; particularly InfoSphere Streams, the company’s event processing engine. But the opportunities for integration can go further, as there are plans for the Now Factory to work with other IBM big data offerings, including PureData System for Analytics and the Hadoop-based InfoSphere BigInsights, if an a CSP wanted to crunch its network and usage data alongside forms of enterprise data. Thirdly, this acquisition also complements the company’s Mobile First portfolio of offerings by providing a new granular source of network and app usage data to exploit.

While IBM has chosen to position the Now Factory in the context of its big data and MobileFirst offerings, it’s still not clear if it will continue to use Now Factory’s multi dimensional tool as the analysis front end for providing insight on this data or whether it will aim to replace it with functionality from its Cognos BI platform (which is part of the company’s Business Analytics product line).

Looking towards its other acquisition, Xtify, this offers a different perspective on mobile customer analytics. In particular the company provide a hosted platform enabling organisations to track those who visit e-commerce websites or use mobile applications from their mobile phones. It uses this information to push communications or targeted messages to customers, such as alerting them to new content when it appears on the site, or by sending them personalised messages about a new promotion. The service can follow a user across different devices including a desktop or smartphone. The plan is to fold the Xtify acquisition into the company’s Smarter Commerce offering, specifically its Enterprise Marketing Management (EMM) portfolio.

In our view this acquisition does make a lot of sense. EMM has grown significantly in the last few years through its acquisitions of Unica, Coremetrics and Tealeaf to offer a set of campaign management and digital optimisation capabilities; but what was really missing was the ability to extend and scale these capabilities to mobile-based marketing campaigns. Xtify offers this opportunity and will also be able to leverage the company’s SoftLayer cloud infrastructure, another recent acquisition.

Unica, in particular (or Cross Channel Marketing Optimisation as it’s now called), provides EMM’s campaign management engine. The plan, as I understand it, is to integrate Xtify’s mobile execution into the cross-channel capabilities of Unica so that marketers can not only engage customers through mobile, but do that in the context of their broader relationship with the customer across channels.

I also see a good fit with Tealeaf too. Since the Tealeaf offering collects information about mobile activity and uses it, amongst other things, to reconstruct and play back web site visits to make usability changes, fix problems and improve the mobile commerce experience, it could provide a vital feedback loop to Xtify by providing information that will help fine tune and optimise its mobile communications and messages.

If you’re interested in understanding more about IBM’s current customer analytic capabilities then I’ve recently published a report which can be found in our research libraryAs always I’d love to hear what you think: are the capabilities offered by the Now Factory and Xtify a consideration for your company?

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