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.

Last week I had the privilege and pleasure of attending SEMphonic’s first ever X Change conference. My friend Gary Angel asked me to give the keynote speech and lead a “huddle” on the processes involved in doing web analytics. As I posted back in August, I was pretty excited about the event because of the format SEMphonic had selected — building the event around small-group interactions rather than the “big room, talk-at-you-not-to-you” format so common in conferences today.

Not that I have anything against big conferences, Jim Sterne’s formerly-called-the-Emetrics Summit is still my favorite conference of all time even thought it will probably grow past 600 in Washington next month, and I had a blast at both Shop.ORG (2000+) and Holland’s E-Day (1500+) and hope to be invited to Internet Retailer’s event in Chicago next summer (rumored to be 5000+). But in my experience big conferences actually limit what you’re able to learn if you’re a face-to-face communicator like me. I always end up having short conversations with people in the hallways between presentations or at social events, and the really deep stuff ends up happening in the proverbial (and real!) lobby bar.

SEMphonic X Change was different.

The huddles more-or-less forced us all to expand on our ideas and share our experiences. The one I led on process was great (I thought) and I ended up agreeing to print and produce “NO TAGS, NO TRACKING” t-shirts for all 15 people in the room. But I was absolutely blown away by the huddles I attended:

• Terry Cohen of Digitas, leading a conversation about measuring engagement that covered how engagement can be measured from the microscopic to the macroscopic level.
• Joseph Carrabis of NextStage, leading a conversation about attitudes and communication
• Matt Belkin of Omniture, leading a conversation about combining online and offline data
• Aaron Gray of WebTrends, leading a conversation about using behavioral data (an EXCELLENT huddle IMHO!)

Think about it: Four huddles led by four of the brightest minds in measurement today (okay, three, since Joseph explicitly states that he’s not a measurement wonk like the rest of us, but he’s the biggest thinker I know …) and there were only 10 people in the conversation on average.

How cool is that?

Not all the huddles were apparently as good as the four I attended, but overall everyone I talked to was quite impressed with the format. And everyone I talked to agreed that they would be back at X Change next year (providing Gary and Joel have the event, which I certainly hope they do!)

I strongly recommend that you consider SEMphonic X Change next year if your schedule permits, especially if you’re an opinionated measurement wonk who isn’t afraid to spout off about stuff they believe to be important (yes Ian, you.)

On that point, this event would have been even better if just a few more people would have made the trip, thought-leaders like Avinash Kaushik (shockingly absent, despite being able to basically walk to Napa from his house if you’re in shape), Brett Crosby from Google Analytics, the Jims (Novo and Sterne), at least one Eisenberg (they sent JQvT instead), Stephane Hamel (budget constraints), Rene and Aurelie, Steve Jackson, the aforementioned Ian, and probably a few dozen more people I’m forgetting, apologies!

I say this because I really believe what I said in my keynote:

Collectively “we” are the web analytics industry.

The vendors are not the industry, the Web Analytics Association is not the industry, all of us are the web analytics industry, and collectively we need to debate and discuss what this industry is going to become. But I don’t believe we can make the decisions necessary in the Yahoo! group, on phone calls, or over email. We need to sit down, face-to-face-to-face and talk about standards, debate definitions, compare notes, and use our old fashioned “Web 0.0″ skills to hash out some of the really hard stuff that remains left to tackle.

Jacques Warren made a similar comment in my call for the WAA to “do something” with their recently published standards document and he is spot-on correct. Web analytics is hard, and it isn’t going to get any easier if we just sit and listen. Let’s sit and talk, let’s debate, let’s act.

’nuff said.

I’ll leave you with this parting shot about X Change, a comparison I’m shocked that nobody smarter than I has already made:

• Emetrics is the Web 1.0 conference for web analytics where you will learn a ton and be very happy
• X Change is the Web 2.0 conference for web analytics where you will contribute a ton and be very satisfied

Mad props to Gary, Joel, Grace, Barbara, Phil, June, and everyone else at SEMphonic for throwing such an amazing event!

My wife needed something from the Apple store yesterday.  I didn’t want to go because I know how I am about new technology.  I told myself, “I will only look” and went so far as to leave my wallet in the car.  I told my wife, “I just got that new Blackberry and it’s really good”  and “I bet the iPhone is more hype than reality” and “I will only look.”
She just laughed at me.

While my daughter hunkered down at the kid’s playstation to play Dora the Explorer and my wife and son did their business, I casually picked up the iPhone.  “Hmmm” I thought, “It’s smaller and lighter than I thought it would be.”

I switched it on and poked around. I tried some typing, since that was my most obvious “out” based on the complaints people had.  Pretty easy, really, and not hard to imagine a software patch that would make it even easier.

Then I tried the web browser, opening up my own web site using iPhone’s Safari.  When I managed to close my mouth (my jaw had gone slack from the complete paradigm shift Apple has created in the mobile computing market with Safari on iPhone) I heard myself say to the nearest Apple store employee “I will take one of these, the really expensive one please.”
Damn you, Steve Jobs.  Damn you, damn you, damn you.
I didn’t need a new phone.  I didn’t need a new carrier.  I didn’t need to cancel a brand-new contract with Sprint.  I didn’t need a new iPod.  I didn’t need a new digital camera.  And I was completely helpless to do anything but pull out my credit card and pay the man.

My wife was laughing, openly.  “You are such a geek” she said.  Then I showed her how it works.  Now she wants an iPhone too.

Damn you, Apple.

If you haven’t seen it yet, don’t look.  Because if you’re like me, you will immediately recognize that for all the faults it might have, the iPhone is at least as revolutionary as everyone has said, perhaps more so.  The device itself is incredibly cool, it passes drop tests and scratch tests that I would never have tried with my Blackberry.  But it is the software, and just knowing that the entire thing is powered by code, that makes it disruptive.

As in disrupted my pocketbook to the tune of over $1,000 in about 5 minutes.  Damn you Steve Jobs.

I’m gonna go and place calls now, but I’ll leave you with this:

Apple iPhone, 8GB version: $599.00
Cancelled Sprint contract: $200.00
New AT&T contract: $119.00 (per month, plus taxes)
Not having to envy someone else’s iPhone every time I fly: PRICELESS

Damn you Steve Jobs.  Damn you for being such a visionary and for understanding the relationship between utility and uber-cool.  Damn you, damn you, damn you.

Avinash Kaushik recently wrote an interesting response to my original post and request for comment from Google. I asked Avinash or Brett Crosby if they wanted to comment on the “Enterprise” nature of Google Analytics in one of the comments. Avinash didn’t want to answer that question, but he did offer some interesting thoughts on the definition of “Enterprise Class”.

In his post, Avinash says:

“Definition of an Enterprise Class vendor :

1) The Vendor has been around for more than 18 months, the longer the duration the better but beyond 18 months you the client decide what you are comfortable with.

2) The Vendor can scale its ASP infrastructure (or in house software solution) to A] capture the number of page views required by the client and B] process that data on a nightly basis.

3) They have a support infrastructure to assist the client in need at reasonable price. If you are willing to pay for support, you should have to pay a reasonable price and expect solid support from the Vendor or their Partners.

That’s it. Nothing else matters. You need to know it has been around and that it’ll be there. No other golden rules.”

While I like Avinash a lot, I think this definition is way off the mark for what most companies are looking for when they say “We need an Enterprise-class analytics solution.” I think what Avinash has described is the core qualities of every analytics vendor in the market today (at least when he includes “or their Partners” in item #3 which picks up Google Analytics and a few others.)

The problem with this definition is that it does nothing to differentiate hundreds of vendors from one another. Kind of like a vendor constellation where every company is stacked on top of one another … So I propose that Avinash’s definition of “Enterprise Class” is incorrect, and instead point to the definition of “Enterprise software” found in the Wikipedia. Some relevant excerpts:

• Enterprise software is software that solves an enterprise problem (rather than a departmental problem …
• Enterprise software is often available as a suite of programs that have attached development tools to modify the common programs for the specific enterprise.
• Mostly [enterprise software] development tools are complex programming tools that require specialist capabilities.

I personally can only think of one currently available web analytics solutions that would qualify as “Enterprise software” using the Wikipedia definition. Remember: Marketing is a department, not the entire business! This definition implies that the solution can be used throughout the organization to solve a variety of problems (for example, online and offline data analysis using the same suite of tools.)

Most interesting to this conversation are these criticisms of the use of the term enterprise (again from Wikipedia):

• Often the term is used to mean virtually anything, by virtue of it having become the latest corporate-speak buzzword.
• Some enterprise software vendors using the latter definition develop highly complex products that are often overkill for smaller organizations, and the application of these can be a very frustrating task.
• Sometimes “enterprise” might be used sarcastically to mean overly complex software.

Ah ha, now the truth comes out! Perhaps the use of the term “enterprise” in web analytics is just a marketing ploy, designed to sound good but not really say anything at all about the sophistication of the solution.

Hmm …

Avinash goes on to offer a “not so humble rant” (his words):

“The reason most of corporate America is saddled with billions of dollars of sub optimal software is that companies judge tools/vendors on this vague quality called “enterprise class”, while completely ignoring what they actually need.”

While not necessarily untrue, Avinash incorrectly assumes that most companies know what they actually need. If most companies were able to “look deeply within themselves and figure out exactly what they need and then go get it” (his words) there would be no need for the vendor constellations that Forrester, Gartner, JupiterResearch and others produce every year. But these vendor assessments are reportedly among the most valuable of all analyst documents; for good or ill, they simplify the problem of differentiating hundreds of vendors who largely all say they do exactly the same thing.

So maybe, just maybe, corporate America has been fooled into buying solutions that are good but aren’t really “Enterprise class software” after all. But maybe they were only doing what they thought was best? As someone commented in Avinash’s post: “Nobody was ever fired for buying Enterprise class software …”

And maybe when the analyst firms call something “Enterprise software”, at least in the web analytics market, they’re simply looking for something that will let them write about a reasonable number of companies, not the 100+ vendors that Sebastian documents at web analytics book? Having written a constellation in the past, I can attest to the complexity involved in covering even a dozen vendors, much less 100!

Perhaps the best possible outcome from this conversation would be that all of the vendors stop calling themselves “Enterprise-class” altogether and instead work to differentiate themselves along other, more substantial lines? I can think of dozens of other good points of differentiation … cost, support strategy, approach to data integration, etc.

In the end Avinash comes closest to the truth when he reminds us that:

“Smart people with crappy tools can move mountains, without smart people even the most expensive and expansive tools can’t help a company move beyond measuring Visits.”

Which I would modify to say:

“Smart people leveraging good business process, despite crappy tools, can move mountains, without smart people and good process, even the most expensive and expansive tools can’t help a company move beyond measuring visits.”

Anyway, with all this in mind I suppose I don’t care if Google believes that GA is “high-end” or “Enterprise class” or whatever. I’m just happy that they’ve raised the bar on the online visualization interface and are continuing to drive interest in web analytics in general. Again, thanks Google (and thanks Avinash for picking up the conversation!)

As always, I welcome your comments and criticism.

I know I’m going to get shit for saying this, but I think that my good friend Judah Phillips and the fine folks at CMS Watch may have too high an expectation about what Google Analytics is supposed to be. Not that Judah or Phil Kemelor are incorrect in their assessment that G.A. is missing a lot of functionality you expect to find in “Enterprise class” web analytics applications—stuff like APIs, data warehouse query, advanced visitor segmentation, look-up tables, data loading, etc.—all of which appears to still be lacking in the new version of Google Analytics.

The thing is, I’m not sure anyone at Google ever said it was supposed to have all that functionality.

Now, I don’t read every word Googler Avinash Kaushik writes (much as I try Avinash, I’m waiting for the book!) so maybe he said something like “Google Analytics version 2 eliminates the need for any investment in web analytics technology, period!” I kind of doubt he’d say something like that, partly because that doesn’t sound like Avinash, but mostly because it’s ridiculous.

Even with Kaushik’s whole 10/90 rule, it’s hard to imagine a thoughtful guy like Avinash saying something like “You should dump your existing million-dollar, multi-year investment in Visual Sciences for Google Analytics and spend the money you save on analysts.”

And I don’t think I’ve ever heard Brett Crosby talk about Google Analytics replacing the other vendors. Again, maybe I’m wrong, but Brett (and Google’s) goal for Google Analytics has always struck me as being basically “great web analytics at the best possible price” not “the only web analytics platform you’ll ever need.” Granted, I kinda stopped paying attention for 17 months there, but given the media fascination with all things Googl-y I bet someone would have said “Hey Eric, did you read what Google said about dominating the web analytics market and destroying the other vendors?”

Judah pointed out this language at Google extolling the virtues of Google Analytics:

“Google Analytics has all the features you’d expect from a high-end analytics offering.”

Yeah, this is wrong, but this is clearly marketing and kind of hinges on the words “you’d expect” doesn’t it? In a high-end analytics offering, I personally expect a high-end analytics offering to provide visitor-based analytics with unlimited real-time visitor and session-level segmentation over the entire data-set plus the ability to define as many data dimensions and custom metrics as I like, combined with a flexible ETL tool that allows me to combine multiple disparate data into a single combined view of my site visitors and marketing campaigns.

Maybe my expectations are too high?

Personally I think that the new version of Google Analytics is one of the best things to ever happen to our industry.

Yep.

Even though Google Analytics still lacks some core functionality that most companies absolutely need when they get really serious about web analytics, the new release does one thing that the industry absolutely needed to push it to the next level: The new Google Analytics interface encourages exploration and supports drilling-down by allowing the user to maintain their inquisitive momentum.

This is HUGE and is one of the things that really excited me about Visual Sciences Visual Site a few years ago. Now, don’t get me wrong, GA2 is no Visual Workstation, but the AJAX and pre-loading they’re doing allows me to quickly change tabs, re-order columns, etc. without having to waaaaaaaaiiiiiiitttttt for the page to load. I am probably the world’s antsiest analyst and I totally hate waiting for data to appear and reports to be generated. GA2 hasn’t done away with that, but it is clearly heading in the right direction.

On this I think Judah, Phil, and I all agree.

I don’t personally think that Google Analytics is high-end or Enterprise-class, and that’s okay. But I do think the new Google Analytics does create real pressure on other vendors to re-evaluate their UI and perhaps places some increased pressure on everyone else to further differentiate their product and solution offerings. Especially if you believe we’ll see an integrated Google Analytics + Website Optimizer + Feedburner (which Ian would probably call the “Fondleburgerwizer”) sometime in the near future …

Not that this should be a problem, since each company has different goals for their application in the marketplace. But it is worth noting that Google Analytics is showing up all over the place. Have a look at this snapshot from the unreleased update to the Vendor Discovery Tool:

What this says is that of the 9,181 URLs tracked by the system, the tool found Google Analytics code on 25% of them. More importantly, both GA and WebSideStory code were found on 6% of tracked URLs, GA and Omniture on 4% of tracked URLs, GA and WebTrends Hosted on 4% of tracked URLs, etc. Personally, if I’m any of these vendors, I really don’t want to see Google Analytics on my paying customer’s web sites.

I’m not trying to be obtuse, but I think it’s only fair to take the recent update for what it is: a really thoughtful overhaul of the primary integration point for most people with their web analytics data. Faster access to data, more relevant metrics tied to dimensions (”bounce rate” against campaigns and search keywords, how freaking cool!), and a brilliant UI built by some of the best in the business.

Nice work, Google.