This Tuesday and Wednesday, the Alteryx Inspire event in London brings to town its “Icons of Analytics”. From brewing to banking, music to manufacturing, oil refiing to medicine, the line-up reflects just how widespread the use of predictive analytics has become. It also explains why Alteryx will pass the $100 million revenue mark this year and the $1.15 billion market capitalisation put on the business following its NASDAQ launch in March.
“We never planned for an IPO,” CEO Dean Stoecker told DataIQ in an interview earlier this year. “Many years ago, we said let’s built a better platform people will enjoy and which builds value for them and us. Now we are on the New York Stock Exchange. We have a number of funds who’ve taken large positions in the float and who are genuinely very excited about the platform. It is a $28 billion space globally that nobody has claimed ownership of - we believe we have the opportunity to do that.”
“21 million people in lines of business are living in Excel hell."
One key element of the solution’s success lies in Stoecker’s claim that, “21 million people in lines of business are living in Excel hell. They are disenfranchised and rely on batch jobs by IT. We found that analysts are spending up to 20 hours per week doing things in Excel that could be reported through Alteryx. That’s a $60,000 waste for every business.”
Reducing this process time delivers an immediate return on investment to organisations which adopt the self-service analytics solutions. But that is just the starting point - through democratisation of analytics, executives in lines of business become analysts who are able to resolve issues and discover new business opportunities through exploring data without having to wait for specialist or technical support.
Stoecker sees a fundamental shift taking place in how companies organise themselves to embed data and analytics. “What we are starting to see is the emergence of the chief data officer (CDO). There were two factions before - IT, where platforms existed and which it managed, owned and controlled, providing output to business users to make decisions - and analysts, who have revolted by bringing in their own tools. Now, IT is giving analysts the critical components they need for success. The CDO is a unifying force, taking the technology, data and people necessary for improvements in operational efficiency and growth,” he said.
In low margin sectors, such as retail, speed of decision making is critical and has a significant impact on profitability. Similar benefits can also be realised in more complex markets. One medical supplies business used Alteryx to model the complex logistics of how to manufacture and distribute the F18 fluoride which is used as a tracer in PET scans. It takes four hours to make and has a shelf-life of just six hours, making it expensive, yet in high demand given the 1.5 billion PET scans carried out on 300 million patients in hundreds of hospitals in the US. As well as optimising its manufacturing, the company has also moved to differential pricing based on location, demand and timing.
"Adoption can only happen when you have got a CDO to unify people and talk up the value of data."
As a result of this new analytics focus and the emergence of the CDO, Stoecker believes the pace of change is accelerating. He said: “At one of our clients in the automotive sector, it took them 40 years to develop 400 SAS users, but only 18 months to develop 1,500 Alteryx users. That rate of adoption can only happen when you have got a CDO to unify people and talk up the value of data. In that company, they found 40 use cases, from autonomous vehicle analytics to travel and expenses claims, which delivered an extra $4 million.”
Alteryx is not the only player in this market - establish analytics and business intelligence vendors are evolving rapidly in response to these same trends, while niche players continue to emerge. However, Stoecker believes that “the competitive landscape has not changed much” since Alteryx launched in 2010 with a focus on data blending from multiple sources to support end-user self-service, not least because of the challenges of reading from columnar and tabular sources as well as on-premise and cloud systems in order to collate the necessary data.
But it does face some challenges, he acknowledged: “Some industry analysts think our pricing is too high. When I hear our customer success stories, I think it is too low. But it is probably perfect where it is. What gets me excited is that our platform allows disruptive innovators to do new things that drive value.”
Some of those disruptors are among the “Icons of Analytics” visiting its London event this week. While they represent a wide range of sectors, they all have one thing in common - a recognition that data needs to be accessible to the people who need to analyse it, rather than locked down in systems or subject to political control by a core function. As Stoecker said: “Power is not in what you know, it is in what you share.”