Investment opportunities in analytics

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Investment opportunities in analytics

  1. 1. Investment opportunities in analytics Evangelos Simoudis, Ph.D. Managing Director Trident Capital esimoudis@tridentcap.com 1
  2. 2. Trident Capital and its analytics investments Founded in 1993 Offices in Palo Alto (HQ), Westport CT Six funds, $1.5B under management, $400M most recent fund Mustang Ventures: $50M, early-stage focus, Shanghai-based fund IT focus, stage agnostic, geography agnostic Analytics investments: Firefly Network Internet Profiles (IPRO) Customer Analytics Cymfony RHI SeaTab AranTech Turn.com, vidavee (strong data analytics IP) 2
  3. 3. Our view of the market dynamics SAP, Oracle and IBM will compete for the Global 2000 SAP and Oracle at the application level IBM at the infrastructure level (unless they purchase a BI pure-play) Microsoft will concentrate on the SMB and on departmental sales with “fat client” offerings This doesn’t bode well for Cognos’ and Business Objects’ growth plans Qliktech is an interesting company to watch as they are growing rapidly in SMB Pure plays (Business Objects, Cognos, SAS, et al) need to re-invent themselves, merge or get acquired Informatica in acquisition discussions Business Objects acquisition spree What if SAS were to be acquired? Teradata’s dominance at the high end DW is being attacked (IBM, HP, Netezza, Sun/Greenplum). Some acquisitions are possible in the space 3
  4. 4. Our view on the industry’s subsectors Analytic applications: In most categories (CRM, performance management, financial decision-making, pricing optimization, web analytics, etc.) leaders have been established Industry-specific analytics: In the data-rich industries, e.g., financial services, telco, pharma, leaders have been established (Fair Isaac, IMS Health, Dendrite, Telephia) Statistical analysis: No opportunities for new entrants Infrastructure: Change management, MDM no opportunities for new entrants, but also few opportunities for exits 4
  5. 5. Investment theses we are pursuing New technologies and business models will change the price/performance of BI and decrease the deployment complexity of existing BI/DW methods Appliances: Netezza, Datallegro On-demand BI: Seatab, Lucid Era On-demand CRM and ERP systems will necessitate the creation of a new class of SaaS-based analytic applications, e.g., sales compensation analytics The adoption of Web 2.0 will drive new classes of analytic applications Analysis of new types of data from social and new media: vidavee, Critical Metrics, Online advertising: media spending optimization (Widemile, Clickable) Personalization/recommendations (Aggregate Knowledge, Loomia, Last.fm) The adoption of the mobile internet will drive new classes of analytics Mobile advertising: Enpocket Analytic applications: AranTech 5
  6. 6. The attraction of BI appliances 30-60% savings on system TCO costs over traditional DW/BI implementations Savings in headcount and in necessary skills to manage the installation Better scalability and performance over MPP-based DW 6
  7. 7. The attraction of on-demand BI Changing the price/performance of traditional BI Quick, low risk, and inexpensive deployment Scalable model in terms of data and users Low-cost administration (data, reports, systems) Reducing the complexity of deploying BI which today inhibits the growth of BI within organizations BI for everyone. Facilitate making all type of decisions: small and big. Today’s BI tools make sense only for large-scale decision- making Reducing the need for a direct sales model, which due to its high costs further contributes to the price of traditional BI solutions Opening new markets: SMB, Global 2000 departments Mid-market BI: 20% adoption, 12% CAGR Issues: 1. Comfort with data leaving corporate premises 2. Data integration of on-premise with off-premise data 7
  8. 8. The size and growth of leading on-demand companies will drive the creation of new SaaS analytic applications LTM LTM Revenue Customers/Seats Rev. Growth Salesforce.com $554.8M 58.4% ~32K/750K (NYSE: CRM) Salesforce.com already lists 35 analytic apps partners NetSuite $76.9M 85% 5300 (IPO filed 7/02/07) SuccessFactors $38.7M 150% 1300/2M (IPO filed 7/20/07) Kenexa $151.8M 82.8% 3000 (Nasdaq: KNXA) RightNow $111.0M 11.8% 1800 (Nasdaq: RNOW) 8 Examples: xactly, Forcelogix, Cloud9 Analytics, Right90
  9. 9. Social networking market statistics Total Unique Visitors (000) Average Daily Visitors (000) Social Networking Site Jun-06 Jun-07 % Change Social Networking Site Jun-06 Jun-07 % Change MySpace 66,401 114,147 72% MySpace 16,764 28,786 72% Facebook 14,083 52,167 270% Facebook 3,742 14,917 299% Hi5 18,098 28,174 56% Hi5 2,873 4,727 65% Friendster 14,917 24,675 65% Friendster 3,037 5,966 96% Orkut 13,588 24,120 78% Orkut 5,488 9,628 75% Bebo 6,694 18,200 172% Bebo 1,188 4,833 307% Tagged 1,506 13,167 774% Tagged 202 983 387% Source: comScore Source: comScore Share of Unique Visitors North Latin Middle Asia Social Networking Site Worldwide America America Europe East-Africa Pacific MySpace 100% 62% 4% 25% 1% 8% Facebook 100% 68% 2% 17% 6% 7% Hi5 100% 15% 24% 31% 9% 21% Friendster 100% 8% 0% 3% 1% 89% Orkut 100% 3% 49% 5% 1% 43% Bebo 100% 22% 1% 63% 1% 14% Tagged 100% 23% 15% 23% 10% 29% Source: comScore 9
  10. 10. Online photo statistics Site Unique Visitors (000) Page Views (M) Photobucket.com 14,729 620 Imageshack.us 10,611 67 Yahoo! Photos 10,459 243 Facebook.com Photos 9,938 2,667 Eastman Kodak 8,518 173 Flickr.com 6,925 72 webshots.com 5,790 213 AOL Pictures 5,354 90 SnapFish 4,538 102 Shutterfly.com 3,949 266 Slide.com 3,167 24 Rockyou.com 2,244 54 Pbase.com 2,004 21 TheImageHosting.com 1,773 11 SmugMug.com 1,391 51 PictureTrail.com 1,301 44 PutFile.com 1,276 12 ImageVenue.com 1,227 20 IStockPhoto.com 1,226 16 photobucket.com flickr.com snapfish.com Picasa 1,126 6 shutterfly.com slide.com Source: ComScore Networks, September 2006 Shipments of digital cameras: 2004: 74M, 2005: 94M Penetration of digital cameras in U.S. households was 42% in 2004 and will reach 81% in 2010 58M U.S. households have both Internet connectivity and a digital camera The core online photo printing market was $550M in 2006 10
  11. 11. Online music growth 3,000 Millions 2,500 2,000 1,500 $2,465 1,000 500 0 2005 2006 2007 2008 2009 2010 2011 Sources: Jupiter Research, Adams Media Research, IDPF 11
  12. 12. Internet video market statistics 4500 Millions 4000 3500 3000 2500 2000 $4,088 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 Video Streamers Video Stream s 0 500 1000 1500 2000 Google Fox Interactive Yahoo Viacom Tim e W arner Microsoft ABC Disney 12
  13. 13. Online gaming usage (including virtual worlds) YoY growth rate for gamers was 79% YoY growth for users of social networking (46%) YoY growth for users of video streaming sites was 123% 13
  14. 14. Mobile usage 14
  15. 15. Analytics for new media ICCARUS is a new visualization service that provides a 3D real-time visualization of the data behind a social network. http://www.viddler.com/explore/rich115/videos/1/ Promonet, an analytic application from IODA, allows music labels to track promotional MP3 downloads in real time, see which blogs & podcasts produce the most click-throughs to retailers, and promote a release and track user response http://www.iodalliance.com/promonetpro.php 15
  16. 16. Vidavee video analytics Extensive data collection and presentation available through Vidavee platform Visual representation of user activity Drives editorial direction Identifies hot-spots 16
  17. 17. Online advertising $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 2005 2006 2007 2008 2009 2010 Global Online Ad Revenues US Online Ad Revenues Global Search Revenues Non Search Global Revenues 17
  18. 18. Social networking ad spending eMarketer estimates that marketers spent $350M on social network advertising in 2006. Spending is expected to rise 147% this year, to $865M, and to $2.15B in 2010 Facebook will release an advertising system to target ad delivery based on profile information of its users MySpace dominates current social networking spending (>60% of all ad dollars on social networks as of late 06), with 4 industry categories accounting for 75% of ad impressions on MySpace (as of late 06): Retail, Entertainment, Telecom, and Web Media Source: eMarketer, February 2007 (http://www.iab.net/resources/industrystats.2007-03-29.asp) 18
  19. 19. Online gaming advertising spending Source: eMarketer, June 2007 (http://www.iab.net/resources/industrystats.2007-06-28.asp) 19
  20. 20. Mobile ad spending eMarketer estimates that marketers spent $421M on mobile advertising in 2006. Spending is expected to rise 114% this year, to $878M, and to $3.415B in 2010 20
  21. 21. Analytics can address several areas within new media advertising Corporations need expert advice to help with new ad formats, e.g., video, pricing models, integration of behavioral and local data Analytics to focus on advertising ROI optimization and click fraud detection Cross media campaign management, including the combination of online (webtop and mobile) with off-line channels 21
  22. 22. Vidavee provides comprehensive analytics for video advertising Watermark detection Face detection / recognition Object detection / recognition Text in Video detection / recognition Voice to text word spotting Behavioral and contextual analysis aids Search and retrieval Automatic placement of ads 22
  23. 23. Summary Despite the recent market consolidation, the need for BI and analytics continues to grow The surging investment interest by VCs to fund BI companies is driven by new data types, technologies and business models Building upon its past successes in the area, Trident continues to aggressively invest in BI 23

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