SAP is buying KXEN
First, some quick history.
- I first heard of KXEN 7-8 years ago from Roman Bukary, then of SAP. He positioned KXEN as an easy-to-embed predictive modeling tool, which was getting various interesting partnerships and OEM deals.
- Returning those near-roots, KXEN is being bought (Q4 expected close) by SAP.
- I say “near roots” because KXEN’s original story had something to do with SVMs (Support Vector Machines).
- But that was already old news back in 2006, and KXEN had pivoted to a simpler and more automated modeling approach. Presumably, this ease of modeling was part of the reason for KXEN’s OEM/partnership appeal.
However, I don’t want to give the impression that KXEN is the second coming of Crystal Reports. Most of what I heard about KXEN’s partnership chops, after Roman’s original heads-up, came from Teradata. Even KXEN itself didn’t seem to see that as a major part of their strategy.
And by the way, KXEN is yet another example of my observation that fancy math rarely drives great enterprise software success.
KXEN’s most recent strategies are perhaps best described by contrasting it to the vastly larger SAS.
- SAS is built around a programming language for statisticians. KXEN tries to automate away many of the steps that SAS experts would program.
- This goes to the extreme that statistically-astute businesspeople are supposed to be able to use KXEN themselves. (However, it’s a general rule — dating back to the 1970s — that marketing claims of “programmers/technologists/experts aren’t needed” tend to be more aspirational than accurate.)
- SAS tries to offer every statistical and machine learning algorithm under the sun. KXEN is pretty focused on a single statistical approach.
- KXEN has followed SAS into offering applications. (It’s also a general rule that predictive modeling “apps” tend to be more in the way of quick-starts than complete products.)
- KXEN has recently tried to sell into markets where SAS isn’t strong, for example internet companies.
That all sounds a bit like a disruption narrative, but KXEN CEO John Ball never gave me the impression he thought strongly in those terms. And indeed KXEN never disrupted much of anything.
So what will SAP do with KXEN? Integrating predictive modeling and business intelligence is both important and difficult. So I imagine they’ll try, but I won’t hold my breath for great short-term success.
The bigger win could come on the application side. I’m skeptical about “analytic applications”, because it’s so tough to build complete ones. But let’s imagine an application that had elements of:
- Database query and update.
- Workflow.
- Reporting and perhaps other BI.
- Predictive modeling.
That would seem more plausible, because it allows the analytic aspects to be smaller and more circumscribed.
As for which specific application areas could use predictive components, the usual suspects are:
- Above all, marketing and CRM (Customer Relationship Management).
- Fraud.
- Risk, although KXEN is nowhere near handling hardcore Basel III compliance, Monte Carlo techniques, or anything like that.
- Quality, especially if we include maintenance as part of quality.
I imagine SAP will start trying to integrate KXEN in some of those areas.
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5 Responses to “SAP is buying KXEN”
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[…] Several analysts have commented on SAP’s move, including Curt Monash. Monash correctly distinguishes between analytic programming languages (such as SAS or R) and […]
Excellent summary. More than a year ago I expressed skepticism about KXEN’s future in these comments. My point then was that KXEN’s value prop was muddled — there are few buyers for black box analytics because the analyst types want some control over the process, while the executives don’t care about analytics per se, but want business solutions.
KXEN’s technology made some sense when they partnered up with solution providers, but enterprise players have rapidly gobbled up prospective partners — Adobe’s acquisition of Neolane being the latest.
Adding KXEN”s tooling to SAP’s existing Marketing Campaign Management tooling simply combines two dogs. In that space, SAP trails so badly they are challenged by the likes of Alterian and SmartFocus.
There is zero chance that adding KXEN to its existing capabilities makes SAP a player in Fraud. They aren’t on anyone’s dashboard.
KXEN may probably be a good addition to SAP with the recent strategies KXEN has implemented. Thanks for the post.
[…] an obvious demand for agile predictive analytics. But if agility were all that mattered, KXEN — which excels in agility — would probably have done a lot better; KXEN’s problem […]
[…] had my first meeting with them this week. To a first approximation, they’re somewhat like KXEN (sophisticated math, non-linear models, ease of modeling, quasi-automagic feature selection), but […]