SAP plans on acquiring KXEN, a builder of predictive-analytics software.
KXEN’s strength lies in automating modeling and analytical functions, which could make data-analytics tools easier to use. SAP intends to integrate KXEN’s technology into its various analytics packages, including its Predictive Analysis software. Combined with SAP’s HANA in-memory technology, KXEN could speed up the crunching of petabytes of data.
SAP declined to offer an acquisition price for KXEN.
KXEN’s core product is InfiniteInsight, a predictive-analytics platform that allows companies to quickly build comprehensive models in a matter of days, thanks to its aforementioned automating of key processes. InfiniteInsight is meant to assist in a broad number of business-related endeavors, including customer lifecycles, marketing, and product improvement. In light of that, the benefits of acquiring the company are obvious for SAP.
But SAP faces significant competition in the analytics space from pretty much every major tech firm on the market, including Oracle, IBM, and Salesforce. Within that crowded arena, SAP has long pushed HANA as its competitive differentiator; but that could only continue for so long before other firms, most notably Oracle and IBM, began building their own in-memory offerings. In the race to bulk up their respective products, these firms have all gone on massive buying sprees, snatching up analytics firms left and right—KXEN is the latest in a long line of acquisitions, with more doubtlessly to come.
Despite all that money and hype, however, there are indications that only a minority of businesses actually use advanced analytics software. “The hype surrounding many analytics technologies—such as predictive analytics—masks the reality that their adoption and usage currently remain limited to some relatively specific instances,” Forrester analyst Charles Green wrote in a July 15 blog posting. If SAP and other companies want to get more businesses onboard the analytics bandwagon—and justify the millions they spend on developing the underlying technology—they need to build software that office workers and executives (not just data scientists) find easy to use. That also helps explain the KXEN buy, considering its focus on automating some of the trickier parts of the analytics process.