Since the acquisition of Visual Sciences/HBX by Omniture, there have been tremendous discussions about the future of the Industry. Everybody seems more or less to agree that a concentration is taking place which is somehow normal as Web Analytics is a maturing industry.

Now let’s imagine for a second that this concentration continues and we end up with two solutions. What if all we had at our disposal was Google Analytics as a “basic” free tool and Omniture, the “enterprise” platform, serving the high-end of the market?

How would this landscape affect consultants and practitioners? Would it be a good thing? Or would it be the end of analytics as we know it today? I wanted to open the discussion regarding this topic and know what other people have to say.

Before I go any further, I want to disclaim that as founder and CEO of OX2 that has now joined the LBi Group, we are vendor independent and we thus have partnerships with many Web Analytics vendors including Omniture (through their certification program) and Google Analytics (being members of the GAAC program). This is my personal opinion and doesn’t necessarily reflect the official position of LBi.

That been said, let’s start the discussion! Take a moment and imagine the future I just pointed out. If we had just those two vendors how would that affect us?

On the one hand, I can think of positive effects:

• Training would be easier for consultants such as ourselves as we would have fewer tools to support and understand. Nowadays we have to understand how to get the same metric from Omniture (SiteCatalyst / HBX), Google, WebTrends, Unica, IndexTools, … which, to be quite honest, is often a pain with many vendors – not all - as their underlying documentation can be opaque and support doesn’t always seem to understand what we are actually talking about;
• Practitioners could more easily switch jobs as all companies would be using either one or the other tool;
• Other products such as content management systems, emailing systems, other internet related systems would more easily be integrated with the two existing WA platforms. And compatibility costs would be lower. But not only online software, this would be also the case for other tools such as BI or CRM tools, allowing a better understanding of the online activities;
• Having only two WA platforms would also allow benchmarking easier as we all know that putting 2 tools next to one another inevitably gives you grey hairs. This might push for standardisation, which in term would also mean that switching between tools might be easier. But here, I might be dreaming: each vendor has his own tags. Moving from one solution to another, when you’re working tag based will always be a nightmare.

But as everything in life there’s no yin without a yang. Let’s see some negative effects of this situation:

• As for many industries, a duopoly generally leads to a lack of innovation. Certainly if there is collusion at hand and as GA’s pricing model is different from Omniture’s one, they might have a shared interest in locking the market between their solutions. After all, competition is good. Just take a look at how vendors have been competing these past years to release more powerful tools and better functionalities to address the complexity of Web Analytics;
• If Omniture would be the only enterprise solution, prices would remain high while I strongly believe that WA tools will more and more becoming a commodity, putting downward pressure on prices. Don’t forget that a tool is just that: a tool and that you need people and processes in order to use them correctly, which are the most important factors in a WA project. We have customers doing great things with Google Analytics and I’ve seen very poor uses of expensive WA tools. Look also at Office suites, currently you could say that you have two main options: Microsoft and Star Office; Microsoft still sells their software at a very high price and they make margins of over 70%! If there was a real competition I bet that prices would be lower;
• Having just Omniture and Google Analytics wouldn’t/couldn’t suit every need. Not all websites are alike and we see it already today that a single tool doesn’t fit all. Take for example Coremetrics that focuses on retailers and seems to be doing a great job regarding this vertical. Look also at Unica that allows big corporations to integrate easily WA to Campaign management.

My opinion regarding this question is that it wouldn’t be good for the industry if we ended up with just 2 products (I’ve taken Omniture and Google Analytics as they are the two most important tools nowadays, but it could apply to any other). As I mentioned tools are just part of the equation, an essential but not an important part.

Getting back to Omniture and Google Analytics, the first still has some competition at the enterprise level, which doesn’t seem to be the case for Google Analytics. Let’s be honest, even if we are big fans of Ian Thomas, Gatineau hasn’t, for the moment, been able to be a big threat to GA …

For more on my perspective you can read some of my thoughts about the future of the Industry following the Omniture acquisition of Visual Sciences here:

http://webanalytics.ox2.eu/2007/10/27/omniture-pacman-what-future-for-visual-sciences/
http://webanalytics.ox2.eu/2007/10/31/how-the-web-analytics-industry-will-evolve-with-omniture-as-the-green-giant/

So what do you think? Do you have other things to add to the pros and cons? How would you see yourself in this scenario? Do you want to see a two vendor market, kind of like Windows versus Apple, or do you like the diversity of options we have before us today?

I am looking forward to having a spirited and honest conversation about the future of the analytics market and thank Joseph and Eric for giving us all a venue to chat.

René Dechamps Otamendi, CEO, OX2 (part of the LBi group)