A dear friend who works for a nice Web Analytics vendor wrote in an email something that surprised me a little bit. If someone else had said that it would not have been such a surprise, but it was someone whom I know well and for whom I have the greatest respect.
In the email the statement that my friend made was:
[ … ] your repeated insistence that web analytics applications should be free [ … ]
This really made me think along two angles:
1] Hmm… does not sound like I have ever said that explicitly or implicitly.
2] Do I really think that? Should all applications be free? Can they be free?
A few moments of introspection yielded a series of beliefs I hold and have often stated on this blog or during speaking engagements:
- Spending on web analytics applications should be a fraction of web decision making budgets: Yes.
- We should take spending away from Vendors and pour it into people to analyze the data. Yes.
- You should not jump in and buy Visual Sciences or Omniture or ABC as your first web analytics implementation. Yes.
- You should know that clickstream is just 30 – 40% of data you need to drive insights. Yes.
- 98% of the clients of existing web analytics vendors (all of them from Omniture to HBX to Google Analytics to ClickTracks to WebTrends and on and on) are not at a level where they could be a solid case study for their vendor because they simply can't show impact from web analytics (and not because they don't want to do a case study). Yes.
- Most people out there don't need one of the big three vendors (but still have them). Yes.
- A tiny fraction of companies in the world, the ones with huge and deep pockets, can exploit the big three and expensive vendors. Yes.
So I fess up to all of the above, a big yes, but my conclusion was that I have never said all web analytics vendors should offer their applications for free. Hopefully you agree with my self diagnosis, if not please share your feedback via comments.
[I certainly believe that in the long run all of the above truths are good for the industry and web analytics vendors because the output (if anyone follows any of the above recommendations) will be smarter clients and analysts who can actually use all the features the big tools possess and smarter client who will push vendors to innovate and push the analysis envelope (in turn helping web analytics vendors to charge their clients more). Win- Win-Win.]
That lead to the second part of the thought process, should all web analytics applications be free? Can they be free?
After more moments of introspection the answer was No. I don’t believe that all web analytics applications should be free or that they can afford to be free at the moment. Reasons include:
- Everyone has to eat, including the analytics vendors !! : ) More seriously….
- Free usually works, or is an imperative, in commodity businesses. Web analytics is not there yet, and neither is the “web”. Maybe basic log file analysis is a commodity, but there is little in terms of actionable insight that one can get from that.
Web Analytics is a baby, it has a lot of growing up to do. Some day it will be all grown up and mature and a stable.
- Perhaps most importantly the world wide web is evolving at amazing speed. New interaction models, different ways of contributing, constant redefinition of content and on and on. Given all these challenges we need the existence of for profit enterprises who can pour resources and $$$ into adapting to all these changes and helping all of us measure success of our web efforts.
Open source is usually sub-optimal in such scenarios (simply don’t have a large enough group out there for web analytics and they don’t have the kind of time or money to keep pace with change).
- Some people make money selling razors, others make money selling razor blades, still others make money coming to your house and giving you a shave (precluding the need for you to buy either razors or razor blades).
Most Web Analytics vendors currently don’t have business models that are much more beyond selling software and some consulting services. They aren’t diversified enough to try different things. So they can’t afford to go free (all except for the obvious one).
Hence atleast for now, except for one, most web analytics applications won’t be free and can’t be free. For now that is just fine for us the customers of these applications because we need for profit enterprises to do lots and lots of good research and development to keep pace with the rapidly evolving web and help us measure what we need so that our brilliant analysts can find insights which ultimately will benefit our customers. Circle of life.
But this does not mean we won’t see some more free versions in the market soon to counter the “Google Analytics effect”. Atleast to protect the “bottom” and middle of the market it is quite possible that we will see a free version of Omniture. Basic metrics and 100k page views per month for free and then a tiered structure pricing. This protects against Google and, soon to arrive, Microsoft’s massive sucking up customers and allows Omniture to make this customer friendly statement: “we’ll hold your hand and walk you to our paid services when you are ready because we have some very complex and sophisticated solutions for you”. Omniture wins and Goolge Analytics & Microsoft have to fight harder and customers win. Cute for us.
This is not too radical a thought, a simple extrapolation from the lessons The Innovator's Dilemma teaches. Mr. Christensen's excellent book talks about technology as a disrupter, in this case the "free high end analytics" is the disrupter.
[IMPORTANT: Omniture is used just as an example since they are industry leaders, you could swap them out for any other major vendor. I have absolutely positively no inside information and have not spoken to anyone at Omniture. What is stated is pure hypothesis, or if it makes you happier, a conspiracy theory.]
In closing, do take a critical look at the web analytics solution that you have and if you have implemented the 10/90 rule in your company. If you have not then it is highly recommended that you fix the balance to be in favor of your analysts. Grow from Free to Expensive and along the way push each vendor you have to provide the value that they promise they will in the demos.
Do you think all web analytics applications should be free? Do you think they will all be free in the next decade? Any other relevant factors that might influence the vendor pricing decisions? Please share your feedback via comments.
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