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9/10/2013
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SAP Buying KXEN For Predictive Analytics Tools

SAP says KXEN deal will bring automated predictive analytics capabilities to business users, not just data scientists.

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SAP announced Tuesday that it intends to acquire predictive analytics vendor KXEN. The terms of the deal, which is expected to close in the fourth quarter, were not disclosed.

SAP already has predictive analytics capabilities in its BusinessObjects portfolio by way of SAP Predictive Analysis software. That tool set is focused on the kind of classic data-mining, data-modeling and scoring procedures that statisticians and analytics professionals have been practicing for decades. KXEN, a privately-held San Francisco-based company, specializes in automating many aspects of prediction so that line-of-business users can make forward-looking decisions directly.

The appeal of business-user-accessible prediction is obvious, and analyst organizations including Gartner and Forrester have called on analytics vendors such as SAS, IBM SPSS and others to make their tools more accessible. One way to do that is to provide abstracted, business-user-oriented interfaces. Another is take advantage of automation and machine learning.

[ Read how predictive analytics is preventing big-city problems: Chicago CIO Pursues Predictive Analytics Strategy. ]

"We're not there yet, but lots of vendors are working on these approaches," Forrester analyst Mike Gualtieri told InformationWeek last year after publishing a Forrester Wave report calling on analytics vendors to make their software easier to use.

KXEN is among a raft of smaller, emerging vendors pursuing automation and machine learning. Others include Alpine Data Labs and Alteryx and process-management vendors Pegasystems and Rage Frameworks.

KXEN's InfiniteInsight software and its Cloud Prediction service platform is said to speed time to predictive insights for customer acquisition, cross-sell, up-sell, retention and next-best offers. The company has more than 500 customers, including Barclays, CBS Interactive, ING Direct, Lowe's, Overstock.com, RealNetworks, Sears, U.S. Cellular and Vodafone.

SAP said it plans to incorporate KXEN technology into cloud and on-premises SAP applications built on the SAP Hana in-memory platform, including the SAP Fraud Management analytic application, SAP Smart Meter Analytics software and the SAP 360 Customer solution. A SAP press release did not say whether the KXEN brand name, offices and management team will be retained.

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D. Henschen
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D. Henschen,
User Rank: Author
9/10/2013 | 7:37:08 PM
re: SAP Buying KXEN For Predictive Analytics Tools
SAP is buying business user "tools," not IT/statistician type tools. What they want from KXEN is a way to automate and simplify predictive analysis so you move it away from analytics wonks who use tools in a multi-step, laborious process. Automation and embedding within cloud- and on-premises apps is the upside of the KXEN approach. A possible downside is that -- I'm told by competitors -- the algorithms are out of the box and a bit of a black box. KXEN has told me that the wonks can open up the hood and tweak the algorithms for customized uses and performance.
D. Henschen
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D. Henschen,
User Rank: Author
9/11/2013 | 6:17:05 PM
re: SAP Buying KXEN For Predictive Analytics Tools
SAP wasn't available for comment before publication of this article, but they've since contacted me to say "upon completion of the [Q4] transaction, subject to regulatory approval and other closing conditions, current plans call for KXENG«÷s existing management team to have key roles following the acquisition as KXEN is integrated into the Predictive Analytics portfolio. Plans are to keep the office as well."
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