Marketing Analysis

Marketing Analysis

Strategic moves by SAS Institute (see Part Two of this note) are a response to the requirement that modern business intelligence (BI) suites be able to access and present key business measures for sales, customer service, the supply chain, financials, purchasing, inventory, and many other areas. In addition to these functions, BI suites must also provide the ability to use information building blocks as the basis for comparisons, calculations, ratios, and metrics. Users should be able to dynamically combine business measures to derive key performance indicators (KPI), such as product profitability, margin analysis, book-to-bill ratios, return on investment (ROI), and other vital metrics. Typical data that manufacturing enterprises should know about, on a daily basis, include inventory situation, rejected items, throughput, booked sales, order status, on-time shipments, and warranty levels. In each of these categories, users may want to get behind the numbers and trends to discern the root causes or find out what items, regions, channel partners, or customers are involved.

Part Three of the SAS: Striving to Sustain Leadership series.

For many reasons, SAS's alliance with Amdocs (NASDAQ: DOX) and partnership with Aprimo might be one of the few vendor partnerships where both customers and vendors benefit. By including customer, supplier, and information technology-related (IT) intelligence, SAS has a product functional scope that moves well beyond financial BI solutions to espouse a holistic corporate performance management (CPM) vision. However, the company will still face strong competition in many vertical markets from other leading BI vendors, such as Cognos and Business Objects. We believe SAS could further strengthen its position and enter more vertical markets by espousing a stronger original equipment manufacturer (OEM) or independent software vendor (ISV) partner strategy, which enables third parties to add their vertical, industry-specific experience, and accompanying front-ends and tools to SAS' analytical engine. The resulting packages could be resold into large and mid-market companies in those verticals.

In addition to the ongoing competition from a plethora of traditional BI players, or from statistical package market players, such as Insightful's S-Plus and SPSS, SAS is also facing a new nemesis in Siebel. Siebel designed Siebel Enterprise Analytics from the scratch and with data integration in mind. In two years, this product has grown from a few early adopters to become one of the vendor's fastest-growing, and possibly the largest product lines in 2004.

Needless to say, Siebel has long been a customer relationship management (CRM) archrival to Aprimo in the realm of enterprise marketing management (EMM), but it has also posed challenges to Amdocs in the call center and customer service space within the telecommunication sector. Both Siebel and Amdocs the largest two remaining pure-play CRM vendors and the competition with Amdocs has only intensified after Siebel acquired the billing and customer self-service provider eDocs, in late 2004. Given Siebel's recent intrusion into the BI market, we might even stand to be corrected by calling it a "semi-pure" customer relationship management (CRM) player. In any case, discussion indicates an intrinsic link between CRM and BI, which is possibly best illustrated within the market automation (MA) and customer service and call center markets (see Marketing and Intelligence, Together at Last and Analyze This).

Despite the challenge posed by Siebel and other rivals, SAS' move to build partnerships, especially with Amdocs should meet the growing need of communications service providers (CSP) seeking to build more profitable customer relationships. Until recently, crucial information was locked in Amdocs' disparate systems, such as billing, CRM, orders management, mediation, etc. and given this, CSPs were questioning such systems value. Through the collaboration between Amdocs and SAS, CSPs should now be able to collect this information and derive useful analyses to gauge the climate of the market and the temperament of their clients, and adjust and build services accordingly. Likewise, if successful, the vendors will also find profitability. SAS will be able to strengthen its position in the telecommunications market and extend its functional CRM footprint and Amdocs will be able to drive its MA strategy forward, and justify its new direction to its current customers. For more information see Amdocs Overhauls Its Marketing series, Part Three.