My thoughts about Omniture and WebTrends

Published by Eric T. Peterson on November 5, 2007 All posts from Eric T. Peterson

A number of you have commented that I have been oddly quiet on the subject of Omniture planning to acquire Visual Sciences and then the news that four senior-most managers at WebTrends were let go. It’s not that I don’t have an opinion — I can assure you that I do — but I wanted to take a little time to clarify my thoughts on these subjects before blogging about it.

On the Omniture/Visual Sciences deal, I sincerely do congratulate Josh James and the entire team at Omniture on building a company capable of completely taking out their biggest competitor. Over the years I have found myself having a somewhat topsy-turvy relationship with Mr. James and his organization: First I had to compete with them while at WebSideStory, winning some deals and losing others. Then I worked directly with them while at JupiterResearch, spending time both in their offices and also on their behalf through online seminars and client events. Finally I spent a little over a year competing with them again, this time at Visual Sciences, again winning some deals and losing others.

Regardless of where I worked, it was impossible to not develop a healthy respect for Omniture and their success. It pained me to watch deals like HP, AOL, CBS Sportsline, USAtoday, Overstock.com and others go their way, despite hard work from a talented group of individuals, and I absolutely hated going up against their particular version of salesmanship. But as an analyst it was encouraging to see Josh and John Pestana build a company that understood the underlying technology but also how that technology could make their customers more successful.

Their customers responded to this, and still do. It is not uncommon to meet Omniture customers who have “drank the kool aid” and for whom their customer status is very much a badge of honor. Hopefully Mr. James et al. will deliver the same Omniture experience for the 1,500-odd companies they’re purchasing from Visual Sciences/WebSideStory, because that is where I see the inherent risk in this deal.

All week last week people with a lot of money under their management asked me “what is the upside and what is the risk in this acquisition?” I’m not a financial analyst (disclosure: I don’t have any holdings in OMTR or VSCN) so all I could comment on was what I hoped the combined company would do and not do. And while nobody from Omniture has asked me — not that it would be particularly appropriate anyway — here are a few thoughts on what the new company needs to do to make this acquisition successful:

  1. Suck it up and start the migration from HBX to SiteCatalyst immediately. I haven’t read all of the various transcripts on this deal, but nobody I am talking to expects HBX to survive the balance of 2008 if the deal is approved (which I sincerely believe it will be.) Omniture should smooth the transition path by splitting data collection at the gateways now and simultaneously loading whatever HBX-collected data into the SiteCatalyst data collectors, thusly giving HBX customers the easiest possible transition from one technology to the other. And while if I were on HBX I would be aggressively thinking about migrating to the SiteCatalyst code base, this transition is far from a slam-dunk at the customer-level. Splitting the data will give marketing something to show I.T. if they complain about needing to replace the JavaScript (again), and getting started on data collection now will potentially ease some of the pain associated with not being able to migrate years of HBX data that some customers might not want to lose (if that is the final assessment.)
  2. Admit that Visual Workstation is the right interface for serious analysts. Again, I have not read the transcripts, but comments I have read are unclear about whether Discover 2 or Visual Workstation will live past the acquisition point. And while I have spent much time looking at Discover 2, I can assure you that of the two, Visual Workstation is the technology to keep (disclosure: I recently entered into a licensing agreement with Visual Sciences to use Visual Workstation at Web Analytics Demystified.) No disrespect to Omniture’s fine product team, but Visual Workstation is unparalleled for sheer analyst-class power, and I’m fairly sure that without modification Visual Workstaion can leverage whatever format Omniture stores visitor-level data to get up and running quickly. This may cause problems from a pure SaaS-perspective, and I could be wrong, but I suspect that most analysts wouldn’t actually mind having to run the software locally in exchange for having the robust data manipulation capabilities that Workstation provides.
  3. As painful as it will be, resolve the internal stuff quickly. A huge potential pitfall in this deal is that it has tremendous potential to create confusion regarding who is managing what, when, where, and how all of these technologies are presented in sales and support situations. Not that this will be easy, any M&A transaction has the potential to be messy, but Josh and Jim MacIntyre won’t be doing anyone favors by sugarcoating what this deal is or being vague about who might be reassigned and who might be let go (keep in mind that these companies that were bitter enemies in the marketplace up until two weeks ago.) Any internal confusion about the transition will inevitably impact customers in the form of unclear deadlines, changing account managers, and other miscommunication that will only open the door for other vendors …

Which brings me to the other change in the web analytics market last week: WebTrends announcing that Greg Drew, Jason Palmer, Tore Steen, and Hamid Bahadori had all been asked to leave the company. I have to admit, I was more-or-less shocked by this announcement, specially given that I have been saying to folks since mid-July that I believe, at least from a software perspective, that WebTrends is finally getting back on track. I really do believe that WebTrends Score is one of the few true innovations we’ve seen in the web analytics marketplace recently, and learned WebTrends users far and wide have commented that they really like the stuff in the MarketingLab2 release.

I should also say that I personally really like Greg Drew and Jason Palmer. Now, I say that not having worked with or for them in any role other than that of an industry analyst, and anecdotally some of the recent flight from the company can be tied back to their leadership. But Greg has always struck me as one of the nicest guys in the entire industry and someone who was willing to do what it took to get the job done.

Regardless of Greg’s personal disposition, I again find myself nearly flabbergasted that the folks at Francisco Partners who are calling the shots would give up Greg and Jason’s experience in the field and knowledge about web analytics in general. I mean, it’s not like Eli Shapira is going to come back and run the company, or that it will be easy to find someone else to run the ship as experienced with web analytics as Josh James from Omniture, Joe Davis at Coremetrics, or Dennis Mortensen at IndexTools. Especially on the heels of the Omniture/Visual Sciences announcement, this whole thing sounds so fishy it’s almost unbelievable, but I have to believe that these four guys will be harder to replace than people think.

Case-in-point: when Jeff Lunsford showed up at WebSideStory sans web analytics experience, some of us were worried. But Jeff was a natural born-leader, and given time it was clear that Jeff had what it took to get the job done. Unfortunately, in retrospect, it is no longer clear exactly what that job was aside from making a small number of people a huge sum of money, and Jeff has moved on to even bigger deals. I liked working for Jeff tremendously, but I’m not 100 percent sure he left WebSideStory in better shape than he found it.

I’ll admit, I don’t have the experience that these guys have … I’ve been running a company of two people for seven months. But just as I felt like WebTrends was well positioned (along with Coremetrics) to be a strong solution with a great customer base, a good set of features, that was incidentally “not Omniture”, I now find myself questioning how strong the organization will really be when run by folks largely new to web analytics. No disrespect to Tim, John, Leo or Bruce, but web analytics is hard, the competition is big and about to get bigger, and sophisticated web analytics buyers will easily differentiate between passion and experience.

Trust me, I want to be wrong about this. I would like nothing more than to have someone clarify what happened at WebTrends and detail how the company is going to accelerate growth against Omniture given their recent momentum. I think despite Omniture’s strength and Google Analytics widespread deployment that the “web analytics wars” are far from over. Like others, I worry that a two horse race isn’t very exciting to watch, and despite believing that “it’s not the technology, it’s how you use it” that it’s nice to see innovation from time to time. For this to happen, I believe we need a strong WebTrends, a strong Coremetrics, and at least a small handful of smaller innovators out there in the world (Nedstat, IndexTools, Clicktracks, etc.) nipping at everyone else’s heels.

What do you think? Am I crazy? Am I just missing the most obvious thing? Am I too close to the situation, having worked with or for all of the companies involved in the past few weeks insanity? Or do you share some of the same concerns I do? Either way, I’d love to hear what you have to say.

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  • David Silversmith

    I would say you nailed everything we have thought of. We had not thought of “splitting data collection at the gateways” right now and for folks who value year over year metrics that would be key to get that going right now.

    As a WebSideStory customer with Visual Sciences contract on the table – you summarized all our thoughts. We’ll be looking for lots of assurances with a pending VS Workstation contract.

    As a general rule, mergers work better for customers the faster you go – but there are always legal, financial and HR issues that slow down that needed transition.

  • http://www.webanalyticsdemystified.com eric

    David: Hey, great to hear from you again! Some folks have commented that “Omniture will just move all the HBX historical data into SiteCatalyst” but that’s more or less like saying “we’ll just move that mountain 3 miles to the left” in my humble opinion. Hopefully all involved know something I don’t in this regard.

    I don’t doubt you’ll be looking for a lot of assurances from J.D. and Jim. I would be too in this situation — same is true with WebTrends customers based on the email I’m getting on this subject.

    Can I ask you your opinion of the WebSideStory + Visual Sciences merger? I’m unable to comment but I would love to hear your perspective if you’re willing to share it.

    Thanks for the comment!

  • http://www.benry.net/blog/ benry

    A well-considered post Eric. Enjoyed hearing your thoughts.

    Re: Omniture and Visual Sciences: I really had hoped that VS would have been able to figure out a way to gobble up Omniture or one of the other players like Coremetrics. Sadly it wasn’t the case. My guess is that many current HBX clients have once considered Omniture at some turn and should be able to quickly assess whether to make the jump over. The big unknown is what you’re jumping over to and at what price. Bigger doesn’t always mean better and best technology doesn’t always win (remember BETA vs. VHS). Will also be interesting to see how they sort out the support and training issues for migrating customers as well since both are issues customers have with both firms.

    Re: WebTrends: I’ve only met Greg and Jason a couple times at conferences, but they both seemed very capable leaders of a major web analytics firm and that they ‘got it’. It’s sad IMHO to see this really come down to this. But despite the various changes and new tools WebTrends was beginning to lose out to Omniture and other players. The money guys ruled the roost and elected to move towards someone who can make more of it, not just ‘get it’.

    Here’s to an interesting ’08

  • http://www.webanalyticsdemystified.com eric

    Scott: (I’m trying to stop calling you Benry …) I agree with you that the customer-facing issues are the most critical for Omniture to aggressively resolve. In fact I am asking questions about support and documentation in the survey I have in the field right now (see http://www.webanalyticsdemystified.com/survey/. We’ll see soon enough whether different vendor’s customers have different perspective on support and training.

    Re: WebTrends … it’s not like it’s only WebTrends that is losing business to Omniture, but it’s also not like Omniture isn’t losing any business out there. I guess I just don’t accept that Omniture has won and everyone else should just throw in the towel. Do you?

    Indeed, 2008 is going to be an interesting year. Thanks for your comment!

  • http://www.foviance.com Sean Burton

    Interesting post.

    I completely agree that 2008 will be an interesting year, especially for the smaller analytic vendors as they will hopefully become more visible to enterprise clients.

    On the downside, the increasing lack of competition at the high-end (>$100K) of the market seems to indicate a slowing down on innovation. This is not necessarily a negative, as this can lead to standardisation, which for many end users would be a blessing! However, standardisation will only work if it offers the necessary functionality to satisfy clients. We often find clients that are on their third or fourth analytic tool, because they have been unable to tailor it to their needs. Innovation will be key over the next 12 months to ensure that web analytics continues to evolve.

    Bring on the new year!

  • Angel

    E – long time listener, first time caller. Good to hear someone articulate that uncomfortable feeling in the pits of my stomach that I, and many others, have over the recent activities in Portland.

    I can only hope that we all get a clearer understanding of next steps – as I agree, Visitor Intelligence and Score are potentially game changing – but also very young features.

    I was looking forward to see how Greg drove value from the capabilities. He seemed to view the birth of these capabilities as steering towards “automated solutions” – driving execution on data in addition to reporting and analysis.

    Omniture and VS – wow…their offspring would be stunning! My hope is simple – take the VS data model (wheels based indexing, extensive support for non-web data), combine it with a catalyst for reporting, and slap Visual Workbench over the top for…well…the rest of us.

    I’ve found one thing interesting that hasn’t been mentioned…and that is the potential power of Omniture’s early 07 acquisition of TouchClarity applied to an extensible data model like VSP5 – predictive analytics across the enterprise…very compelling.

    Webtrends and Omniture (and Core) all seem to have the same basic constructs in place – they are moving beyond “web”analytics AND seem to be focusing in driving action from the data they house…allowing Omniture to monetize the value of data via pragmatic, programmatic solutions (automated email – as an example).

    Would LOVE to hear others thoughts!

    Benry – loved the VHS / Beta point…insight AND terrifying all at once.

  • http://www.webanalyticsdemystified.com eric

    Sean: I’m not so clear on the fate of the small(er) web analytics vendors in 2008 and 2009 at this point. On one hand I think there is potential upside for companies like Clicktracks and IndexTools who have both demonstrated innovation around their UI (Clicktracks) and their pricing model (IndexTools). But on the downside, true “Enterprise” prospects now have a viable pool of three (four, if you count Unica) major vendors to have into the RFP process. Sure, that was the case last month as well, but now that we’re in the middle of “the big shakedown” I suspect that companies may treat analytics vendor selection slightly differently.

    I agree, any slowdown in innovation is bad news. Hopefully that won’t happen!

    Angel: Always happy to hear from first-time callers! And I agree that the new stuff from WebTrends is pretty young but as folks have pointed out, it’s not like the company is brand new or anything. I believe they’ll make these new features work in the marketplace.

    I also agree that it will be interesting to see what the combined OMTR + VSCN teams come up with down the road as they whack together all the cool technology they have acquired. Somewhat lost in the shuffle is the fact that with VSCN they also got a content management system (Atomz) that could be leveraged against search (again, Atomz), metrics, Offermatica, and ultimately Touchclarity.

    It would be a lot of building but it would give the company end-to-end visibility into site design and visitor behavior.

    Thanks to both of you for commenting!

  • http://betterretail.wordpress.com/2007/10/11/the-grand-retail-unified-theory/ Rishi Rawat

    For 3 years I have nursed the idea that no one wants to read long Blog entries. In those 3 years I have never read a long Blog entry. I read your article from start to finish. This is especially strange because I don’t know a thing about websidestory, omniture or the people who lead these companies.

  • http://www.webanalyticsdemystified.com eric

    Rishi: I’m glad to hear you enjoyed the piece, or at least that you ready it from beginning to end. Thanks!

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  • Sailed Away

    About WebTrends…

    As a former WT employee, I can tell you firsthand that things got really, really bad over the last year in terms of turnover and morale – especially in engineering. IMO there were some seriously dysfunctional leadership/personality problems on the inside that justified this kind of drastic mgmt change.

    Similar comments here:
    http://webanalysis.blogspot.com/2007/11/management-shakeup-at-webtrends.html

    I really hope for the sake of the good folks still there that new mgmt can turn things around.

  • Brian Mulvaney

    “…I absolutely hated going up against their particular version of salesmanship.”

    lol. I feel your pain brother. If only you knew some of the stories. Well, actually I’m sure you do.

    Grant Josh James & Co. this: they are playing for keeps. I didn’t think Omniture would successfully make the transition to public company status without big changes in their business practices. As a private company they traded margin for momentum and overspent on sales & marketing and on loving the customer after the sale. It strikes me as a really big bet. The kind of bet maybe only a founder could make. I didn’t think that mindset and behavior would carry past an IPO. It has, the market likes the story and has awarded OMTR with company gobbling market cap.

    Regarding WebTrends: I’ve compared notes with two fellow members of the WebTrends diaspora over the past week. We don’t know *anybody* working in sales at the current WebTrends and that’s across a combined network of at least a couple hundred sales and marketing types with serious web measurement experience. Word on the street in Portland is that Greg Drew resolutely refused to pay for sales performance. You can accuse Josh James of any number of sins. Underpaying sales isn’t one of them.

    I find it ironic that over the past couple of years the privately held WebTrends continued to behave like a listless public company while the post IPO Omniture lost little if any of it’s aggression. Change was overdue at WebTrends. Francisco Partners was right to bring in a new crew.

    Momentum is everything in technology. I’m dubious that Omniture can maintain theirs. A revitalized WebTrends would be an interesting player. That’s going to take new ideas, new players and an open wallet. Private equity can afford to be bold. Now’s a great time for WebTrends to run a play out of the Omniture playbook and trade margin for momentum.

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  • Pingback: Web Analytics Demystified » Blog Archive » The bleeding at WebTrends continues …

  • Marc Bernard

    I’ve heard that WebTrends could buy a Voice of the Costumer – servey – company like iPerceptions to leverage their mutual data and clients. Do you think it would be a good move for them? Do you think they would do that soon, despite managerial changes?

  • http://blog.rodkin.com JR

    I think the internal view at WebTrends is now quite positive, much like your view on their ability to compete – great potential, good products in the market, and a bright future while they close some of the gap with OMTR. But that was not the internal view when the management change happened.

    http://blog.rodkin.com/2008/02/management-and-company-culture.html

  • http://www.webanalyticsdemystified.com eric

    John: Wow, your post was certainly interesting and I don’t think I’ve ever seen anyone air dirty laundry like that in this industry. And while I am excited for you, Alex, Kory and others who are jazzed to be (back) in positions of power at WEBT, I am a little surprised to see the comment from “Minion #13″ in your blog.

    Thanks for your comment!

 


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A Guide to Segment Sharing in Adobe Analytics
Tim Wilson, Partner

Over the past year, I've run into situations multiple times where I wanted an Adobe Analytics segment to be available in multiple Adobe Analytics platforms. It turns out…that's not as easy as it sounds. I actually went multiple rounds with Client Care once trying to get it figured out. And, I’ve found "the answer" on more than one occasion, only to later realize that that answer was a bit misguided.

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Currencies & Exchange Rates
Adam Greco, Senior Partner

If your web analytics work covers websites or apps that span different countries, there are some important aspects of Adobe SiteCatalyst (Analytics) that you must know. In this post, I will share some of the things I have learned over the years related to currencies and exchange rates in SiteCatalyst.

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Linking Authenticated Visitors Across Devices
Adam Greco, Senior Partner

In the last few years, people have become accustomed to using multiple digital devices simultaneously. While watching the recent winter Olympics, consumers might be on the Olympics website, while also using native mobile or tablet apps. As a result, some of my clients have asked me whether it is possible to link visits and paths across these devices so they can see cross-device paths and other behaviors.

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The 80/20 Rule for Analytics Teams
Eric T. Peterson, Senior Partner

I had the pleasure last week of visiting with one of Web Analytics Demystified’s longest-standing and, at least from a digital analytical perspective, most successful clients. The team has grown tremendously over the years in terms of size and, more importantly, stature within the broader multi-channel business and has become one of the most productive and mature digital analytics groups that I personally am aware of across the industry.

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Ten Things You Should ALWAYS Do (or Not Do) in Excel
Tim Wilson, Partner

Last week I was surprised by the Twitter conversation a fairly innocuous vent-via-Twitter tweet started, with several people noting that they had no idea you could simple turn off the gridlines.

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Omni Man (and Team Demystified) Needs You!
Adam Greco, Senior Partner

As someone in the web analytics field, you probably hear how lucky you are due to the fact that there are always web analytics jobs available. When the rest of the country is looking for work and you get daily calls from recruiters, it isn’t a bad position to be in! At Web Analytics Demystified, we have more than doubled in the past year and still cannot keep up with the demand, so I am reaching out to you ...

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A Useful Framework for Social Media "Engagements"
Tim Wilson, Partner

Whether you have a single toe dipped in the waters of social media analytics or are fully submerged and drowning, you’ve almost certainly grappled with "engagement." This post isn’t going to answer the question "Is engagement ROI?" ...

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It’s not about "Big Data", it’s about the "RIGHT data"
Michele Kiss, Partner

Unless you’ve been living under a rock, you have heard (and perhaps grown tired) of the buzzword "big data." But in attempts to chase the "next shiny thing", companies may focus too much on "big data" rather than the "right data."

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Eric T.
Peterson

John
Lovett

Adam
Greco

Brian
Hawkins

Kevin
Willeitner

Michele
Kiss

Josh
West

Tim
Wilson

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You can contact Web Analytics Demystified day or night via email or by reaching out to one of our Partners directly.

» Contact Information

Web Analytics Demystified, Inc.
P.O. Box 13303
Portland, OR 97213
(503) 282-2601


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