How To Profit From The Web Analytics Whirlwind - InformationWeek

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2/17/2004
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How To Profit From The Web Analytics Whirlwind

And as more companies look to leverage their Web sites to accomplish things far beyond statically listing products, Web analytics software is gaining near-mission-critical stature.

Call Technology Leaders atypical in today's VAR universe, but it has no regrets about placing all of its eggs in one vendor's basket. In fact, the New York-based solution provider couldn't be happier in its commitment to NetIQ's WebTrends Reporting Center, the lone software forming the crux of the company's burgeoning Web-analytics business.

Technology Leaders isn't alone in its devotion either; its preferred product recently nabbed top honors for Web-based software in the 2003 VARBusiness Tech Innovators Awards.

It's no wonder: Web analytics is a hot business. And as more companies look to leverage their Web sites to accomplish things far beyond statically listing products, software such as WebTrends Reporting Center is gaining near-mission-critical stature, says Andrew Edwards, managing partner at Technology Leaders.

"Companies are hungering for solutions that let them understand the quality, amount, accuracy and meaning of their Web traffic," Edwards says. "More than anything else, WebTrends gives us the tools to make sure the solutions we build have business value for each specific constituent."

Edwards cites numerous reasons for banking on the market-leading Web-analytics solution. For starters, NetIQ avoids the bifurcation among Web-analytics vendors that sell packaged software or hosted services. Instead, NetIQ does both, which the folks at Technology Leaders say meets their customers' flexibility requirements.

And the product? Highly sophisticated, Edwards says. It's able to tackle a range of different needs, from e-commerce-related data analysis to one-to-one marketing campaigns. The 6.0 version is also brimming with customization tools that let VARs add value on top of the core solution.

"And in terms of the software, the feature set is extremely robust for the price," Edwards adds.

Fruits of Migration
NetIQ is a $300 million-a-year company best known for systems- and security-management offerings. The WebTrends family of products represents about 21 percent of NetIQ's business and has been a profitable segment for the past two fiscal quarters, according to Greg Drew, general manager for WebTrends at NetIQ.

The flagship WebTrends Reporting Center 6.0 represents the fruits of the company's migration to a single code base for its software and services offerings. WebTrends Reporting Service, the hosted version of the Web-analytics offering, now shares the same Java-based architecture with its software siblings. This unification is aimed at enabling customers to transition between different software-delivery models (hosted or packaged) more easily, Drew says.

Charles Carlson, CEO at Dallas-based solution provider Compeware Technology Associates, lauds the new single architecture.

"It's very important today because the majority of the competition is ASP-based and doesn't offer software," he says. "And the downside to a hosted-only solution is if you decide to bring your reporting in-house, you lose all the data the hosted company has been providing."

Carlson cites some other features that make WebTrends stand out, including its flexibility in data-collection techniques. WebTrends uses both data-collection methods in vogue today: analyzing Web logs and placing Java scripting tags onto individual Web sites to track data on visitor behavior and other predilections.

Other notable features include WebTrends' customer-segmentation capability, which gives e-commerce businesses insight into how much customers spend and how loyal they are. Technology Leaders' Edwards also points to the ability to generate custom reports. VARs can tailor templates from WebTrends to measure specific sets of data or trends on a Web site.

Compeware's Carlson also likes the custom tables. "WebTrends is the only vendor that can display multiple dimensions and measures into one report, as well as drill down reporting within the same report," he says.

There are, however, areas for improvement, Carlson notes. For one, NetIQ could liven up its rather bland user interface and reduce the need to rerun data through the system every time the user changes the focus of a report.

Another challenge is perception, Carlson says. Though WebTrends has evolved well beyond its heritage as an entry-level product, VARs will find they need to convince large enterprise clients of that.

And, yet, because WebTrends owns so much of the low-end market, the installed base is ripe for the upsell to WebTrends Reporting Center 6.0. The migration opportunity, along with the ever-changing data analysis and measurement nature of the product, render it a long-term commitment for many VARs, which are often called on to tweak the software.

"These are not install-and-leave engagements," Edwards says. "We tend to become the Web-analytics consultant for the duration for companies."

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