According to the company web site, on-demand BI vendor LucidEra was formed:
“to shake up the stagnant business intelligence industry and traditional approaches to corporate information access and analysis by delivering business visibility as an on-demand service.”
And LucidEra has indeed been innovative, developing deep expertise in the area of Sales Pipeline analytics with a 48h Pipeline Healthcheck service that in the words of Phil Wainwright, aims to “deliver return *before* investment”:
“In just 48 hours the LucidEra Pipeline Healthcheck will identify opportunities and risks in your sales forecast. We’ll analyze the health of your pipeline, sales people, and overall sales process to help identify ways to increase revenues, decrease pipeline risk, and get more predictable sales results. Plus, we’ll provide an interactive analysis so you can dig deeper into the results. We’ll quantify the results of our findings and show you the impact that on-going business intelligence as a service can have on your sales revenues.”
But unfortunately it looks like the storm clouds may be gathering for the company. This weekend, LucidEra’s Founder and CMO Ken Rudin informed friends and colleagues that:
“my email address is changing and I am no longer using the email address firstname.lastname@example.org”
And now competitor GoodData has put out a press release claiming that LucidEra is “offering to sell its intellectual property after almost four years of operations” and announcing a “program to offer existing LucidEra customers free access to its innovative on-demand analytics service” with six months of free access to applications.
There has been no confirmation (or denial) from LucidEra so far [update: see below]. If indeed it is the end of an era, there will inevitably be a post-mortem discussion of what factors led to the company’s problems, and what it says about the on-demand BI market in general – particularly since various surveys and analyst postings at the start of this year predicted a rosy future for business intelligence software as a service in 2009.
The current rumor is that the company’s problems are primarily a result of bad timing, with the company needing another round of financing in a tough market, despite good products and pipeline.
My position has always been that on-demand business intelligence is an essential part of the market, but that some of the claimed benefits have been over-hyped.
In particular, I don’t think the debate should be about about choosing between on-demand and on-premise: customers should be able to seamlessly and easily move between one and the other according to their needs, using the same technology platform. This has been the position with SAP BusinessObjects’ business intelligence on-demand offering (www.ondemand.com), that use the standard BusinessObjects platform, in the cloud, on a multi-tenancy platform.
In the meantime, let me point out that Darren Cunningham, LucidEra’s excellent VP of Marketing writes an interesting, entertaining, and valuable “Keep it Simple” blog, and Darren just posted the list of all-time most popular posts:
- 9 Holes of Sales Analytics Best Practices
- Sales Analytics for the Board of Directors
- What is Your Data Actually Telling You?
- SaaS BI – Analytic Aspirin in a Difficult Economy?
- What’s in Store for Business Intelligence in 2008
- Guest Blogger Alert – The LucidEra Opportunity
- We Couldn’t Get the Answers
- Everything is a Platform
- What’s in Store for Business Intelligence in 2009
- Transforming Marketing’s Traditional 4 P’s into SaaS’s 5 A’s
- Take the SaaS BI Survey
- Sales 2.0 Data Points and Anecdotes
- Using Analytics to Avoid Wasting Time
- The Call for Basic Numeracy
- What is an Analytic Application?
- What is Cloud Computing?
- IDC Predictions for 2009
- Ashe on SaaS
- A Visionary Who Thinks Clouds will Cloud His Vision
- The Power of Pie Charts
I wish all the best of luck to Ken, Darren, other employees and customers of LucidEra…
Update: the rumor is now confirmed:
Software-as-a-Service (SaaS) business intelligence (BI) provider LucidEra will cease operations by the end of this month, a company executive has confirmed.
The vendor sent an email to customers on Thursday with the news and pledged to help customers wind down their relationship with the company and its SaaS-based BI products by the end of June, said Darren Cunningham, vice president of marketing at LucidEra, in a phone interview.
LucidEra’s decision to shutdown was brought about by a lack of funding, not a lack of interest in its products or in SaaS BI on the whole, Cunningham said. He would not go into details regarding LucidEra’s financial problems other than to say, “It was a matter of funding or being acquired. And neither of those things happened.”
LucidEra’s prepackaged BI reports focus primarily on Salesforce.com-based data. The company’s last round of funding came nearly two years ago in August 2007, when it raised $15.6 million in Series B funding, according to LucidEra’s website.
8 responses to “End of a LucidEra?”
[…] distribution channel to boot. And we’ve already seen cloud based BI such as Lucid Era fail to get off the ground indicating that this isn’t simple. But TideMark seems to have thought […]
“Standard schema structure” analytical value prop is littered with failed examples in history:
1. Harmony Software tried to it with SAP
2. Merlinsoft tried to it against Siebel (later acq by Brio > Hyperion > Oracle and now killed)
3. Hyperion tried to do it with Performance Management Accelerators (pre-build ETL into Essbase from E-Business Suite and KPIs/dashboards to match, killed after two releases).
4. Acta packaged offerings against SAP (not sure if they are still on SAP’s price sheet, the brain trust has all left)
5. Informatica tried to execute in the failed foray into the analytical apps market.
They have *all* failed. I was involved with #2 and #3 above, and the value prop just isn’t there. Its tedious development work to get a general purpose extraction built that handles enough variations. The customer balks at paying a six-figure price point which is needed to make it a viable business (from their point of view, it needs to be customized anyway – e.g. “Oh its great that you can decompose my GL COA into OLAP dimensions, but do you also handle stat accounts and sub-accounts?”). In any specific company’s case, their DBA can figure out the extractions in under a month, so the cost savings often cannot be communicated.
I’m not saying it can’t work, just that the deep solution has been proven as not the way to go time and time again.
I think LucidEra’s fundamental flaw was their decision to focus on sales reporting. Although marketers often CLAIM they want better reporting, they rarely are willing to invest in it (otherwise, the problem would have been solved long ago). When I spoke with LucidEra in April, they had just 50 paying customers, compared with 40 the previous June. Either they weren’t selling or they had high attrition. Either way, they were not offering something that people were willing to pay for. See my blog post at http://bit.ly/tSf6q for a more detailed analysis.
Great comments here. Having run engineering at Cloud9 Analytics and coming into SAP Business Objects OnDemand, I have been in this business to understand the fundamental characteristics of this business. The SaaS business is not just about an Outsourced BI Solution … it is about building out a platform that can scale well and has the characteristics of continually lowering your incremental costs for on-ramping new customers. Multi-tenancy or not, a SaaS software product has to offer a low TCO value proposition to customers. The money that LucidEra tried to raise was a direct function of the cost of maintaining and operating their platform … This is the nightmare scenario for any board member contemplating an inside round or a potential outside investor. Cloud9 Analytics is not insulated from this issue either. They just managed an inside round to give them some additional runway. At SAP Business Objects, we continue to push hard on lowering the costs of our SaaS BI Platform … That’s the only recipe for operating a successful SaaS business. Yes, multi-tenancy gives you a great head-start. Innovation in the SaaS business is about maximizing value delivery to the customer powered by a platform that scales well with a declining incremental operating cost behavior. Yes, line of business managers want solutions and not BI tools. Both Cloud9 and LucidEra focused on a solution value pitch. The costs matter ultimately, both to the SaaS ISV as well as to the customer, assuming all things equal for a Value delivery and BI Investment recovery characteristics for the customer.
Hi Timo, since I was part of the LucidEra team and on board with the company’s early vision before my departure in 2007, I can’t resist the temptation to comment here.
Seth is right, the LucidEra deliverables were really pre-packaged analytic applications, not an open ended, general purpose BI platform. The early bet was that a standard schema structure and a standard BI stack (with data cleansing, data integration, storage, and ad hoc report generation capabilities) could be applicable to multiple pre-packaged business processes and problem areas. And, with a fixed set of fields to be populated for each app, the bet was that the integration and deployment costs could be brought down as the deployment staff’s experience grew. Furthermore, the assumption was that the operational reports delivered would then become a standard element of each customer’s process and hence would bring in good renewal rates for the SaaS vendor.
So, in summary, the bet consisted of 3 key elements:
1. A multi-purpose platform capable of supporting multiple pre-packaged analytic applications developed by LucidEra, or potentially by partners with the relevant domain expertise.
2. Enough data integration repeatability in terms of populating the same standard set of fields for each application to allow for a gradual drop in the deployment cost over time as the volume of customers increased.
3. Operational reporting applications that would be needed and used in an ongoing basis by customers and would thus deliver decent renewal rates.
I doubt that data integration complexity, as some have claimed, is what “tripped” this initiative. The company probably did not get far enough down the experience and cost curve to validate the theory that the data integration tasks for an analytic application would be sufficiently repeatable to bring in efficiency gains over time.
My guess is that the company faltered because it was forced to narrow its focus to a single analytic application area. This may have been due to limitations in the core platform that made supporting multiple application areas too time consuming and expensive, to the cost of building domain knowledge in the company around multiple process areas of expertise, or due to both. I don’t know. In any case, the company probably had no choice but to “double down” in one analytic application area, namely sales analytics. The total available market for this one analytic application area was simply not large enough to support the significant costs to build and sustain the full BI analytic application stack.
If someone can come up with a more cost effective way to build and support a versatile BI analytic application platform and potentialy enlist design partners with the relevant domain expertise to create the packaged applications, they may yet be able to prove the second and third elements of the LucidEra bet, namely that integration and deployment costs can indeed be reduced over time and that renewal rates for these types of pre-packaged applications can be strong.
Best of luck to Darren, Ken, and to the rest of the LucidEra team.
It is so sad to see a company closing down,bcoz LucidEra started as a SAAS company and they have tried to be a front runner in the technology.
Timo, thanks for the kind words and support. Very much appreciated!
Timo, I think it’s worth making clear: LucidEra has never been a general-purpose BI company. LucidEra offers a sales analysis platform.