When a Chart Is Worth a Thousand Words
A decade ago, data analysis was a chore. Workers poured figures into Excel and then spent hours searching for patterns. That process is getting less cumbersome, thanks to a handful of companies selling visualization software that can help even neophytes turn data—from hospital readmissions to call-center traffic—into colorful, interactive bar graphs and pie charts. “It just happens to be the perfect tool that allows us to answer most folks’ questions,” says Christine Birtel, a senior vice president at Wells Fargo, where some 1,500 employees in her Wholesale Internet Solutions group use data visualization software developed by Tableau Software.
Tableau clocked the fastest sales growth, 84 percent, of any leading business analytics company last year, according to researcher IDC. Adoption of Tableau by corporations as well as nonprofits, hospitals, colleges, and government agencies has picked up since the Seattle-based company rolled out a cloud-based version of its software in 2013. The company’s revenue is on track to jump 68 percent, to $391 million this year, according to data compiled by Bloomberg. A rival with similar data visualization products, Qlik of Radnor, Pa., grew 20 percent last year, says IDC.
The global market for query, reporting, and analysis software, including data visualization programs, will grow to $14.7 billion in 2018, up from $10.4 billion this year, IDC estimates, spurred in part by expansion of cloud technologies. The cloud has made it easier for even small businesses to store large troves of data. It’s also allowed software startups to create applications that can be accessed via the Web, without customers needing to spend money on hardware to run the systems. Researcher Gartner forecasts that at companies that rely on data, business analytics software will be used by 75 percent of employees by 2020, up from about 50 percent today.
Tableau and Qlik have released pared-down versions of their software that can be used for free. Small-business owners, homeowners, and dieters can use them to create graphics to track supplies, heating bills, and calories. Tableau is “big data for the mass market,” says Brent Thill, an analyst at UBS. “Everyone is a potential user.”
The popularity of Tableau’s and Qlik’s products has spurred tech giants to beef up their own offerings. Microsoft announced a new analytics tool, which works with Excel, in February. SAP has been updating its Lumira data visualization tool every six to eight weeks, though it typically refreshes its products once a year. Rita Sallam, an analyst at Gartner, says many of the data visualization offerings from established companies will have a hard time catching up with the two. “The incumbent vendors are late to the party,” she says. “All of them were blindsided by the success of Tableau and Qlik.”
Competition is getting tougher. In October, Salesforce.com introduced its Wave cloud analytics product, which works on mobile devices; it’s already in use at GE Capital, Equinix, and a few other companies. “I’ve never seen a product at Salesforce.com get off to a faster start,” Chief Executive Officer Marc Benioff said in a November call with investors.
The more formidable competitor in the long run may turn out to be IBM. The company has just released a product that builds on its work on Watson, the supercomputer that appeared in 2011 on Jeopardy! The software that powers Watson Analytics can understand questions typed in everyday language and gins up graphics to illustrate answers. It also suggests follow-up questions. “It’s kind of like having an assistant that’s taking you by hand on your journey,” says Eric Sall, vice president for business analytics at IBM.
Watson Analytics will have another advantage: It’s free. The company will charge a monthly fee for premium features, such as extra storage and enhanced sharing capabilities. “We are taking a very aggressive strategy,” Sall says. “There’s definitely a possibility to get to millions of users.”
Tibco in November began offering its visual analytics software, Spotfire, on an hourly, pay-as-you-go basis to customers using Amazon.com cloud services to store the data. “Our products start at less than $1 an hour,” says Brian Gentile, a senior vice president at Tibco. Tableau charges $500 per commercial user per year. Qlik charges $1,350 or $1,500 per user, depending on the product, but offers companies volume discounts.
Tableau is working to preserve its growth lead. The company is planning to release a mobile product next year and is plowing 27 percent of its revenue into research and development. “We are investing as much in R&D in the next two years as we did in the last 10 years,” says Elissa Fink, Tableau’s chief marketing officer.
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