On the Radar: Versium challenges the goliaths of marketing clouds Publication Date: 14 Mar 2017 Product code: IT0014-003239 Tony Baer
Summary Catalyst Some of the most common use cases of big data analytics have centered around answering the question, "What is the customer most likely to buy?" Not surprisingly, this has been well-trod ground by BI and analytics tools, by data scientists developing custom algorithms on internal data sets, and more recently, by "marketing clouds" offered by providers like Adobe, IBM, Oracle, and Salesforce. Over the past year, a new player has emerged with a self-service tool that, under the covers, harnesses machine learning, backed by a proprietary data set with more than one trillion attributes. The company, Versium, emerged from stealth last year, garnering several dozen customers (including T-Mobile, Microsoft, and Wunderman). By packaging the machine learning under the hood of a selfservice tool, Versium enables marketers to perform sophisticated predictive scoring without need of a data scientist. Key messages Versium is an emerging player in delivering predictive customer analytics. Its OEM deal with Microsoft should help provide visibility in a market populated by IT household names. Versium differentiates by offering a broad and deep set of consumer and business data harvested and acquired from multiple sources, fronted by a self-service modeling tool that incorporates machine learning to help businesses predict customer behavior. Versium's greatest challenge is securing mindshare as a new player in a market where larger players offer sales, marketing, and consumer information clouds that overlap with Versium's Datafinder product, but do not necessarily directly compete with it. Ovum view Backed by a broad and deep tranche of consumer and business data, Versium delivers self-service analytics for predicting customer behavior. While it competes in a field with much-better-known players, its recent OEM deal bundling its Versium Predict and Datafinder products into Microsoft Dynamics 365 CRM will significantly boost the company's visibility. Recommendations for enterprises Why put Versium on your radar? Predictive analytics on consumer behavior is a well-populated field. Nonetheless, based on the realization that "data is king," Versium offers a compelling alternative whose secrets include access to a vast store of consumer and business data with a tool that incorporates machine learning under the hood to help mass marketers predict customer behavior. Organizations should consider Versium if they are looking for an alternative to recruiting data scientists for building custom predictive models. Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 2
Highlights Background Predicting customer behavior whether it is about what and whether they will buy product or probably churn has long been a staple of analytics tools; it is also one of the most common use cases that Ovum has identified among adopters of big data analytics. Versium is taking advantage of the economies of storage and compute in the cloud, and the flexibility of machine learning to deliver predictive scoring at a fraction of the cost of building custom behavioral models from scratch. Like many software vendors, Versium's vision was to productize solutions developed from early consulting engagements for applying machine learning in place of traditional static rules to help consumer businesses target promotional offers more reliably. At one media client, for instance, the Versium solution improved the response rate for targeting promotions by 100%. The founders of Versium recognized that with the right data and self-service tooling, they could scale these results to a much larger market. The founding team has significant background with building and delivering commercial data sets, having founded InfoSpace (which brought the Yellow Pages online) as a Web 1.0 entity back in the late 1990s. The way forward from there was through building the self-service analytics tool that would leverage machine learning for predicting customer behavior, and backing it with a large proprietary data set (trademarked LifeData) that would be acquired, licensed, and built from a multitude of data sources. The tool, named "Predict," lets businesses select their lead lists from their CRM system, enrich it with data from Versium's LifeData, and then score leads based on predictive models and machine-learning algorithms under the hood. By packaging the models under the hood, Versium has enabled clients to score their customers without needing a data scientist. The same underlying predictive models can be used to identify new targets (by scoring Versium consumer and business entities) that have the highest propensity to buy and inject them directly into the CRM or marketing automation systems. LifeData, part of Versium's Datafinder service, is the cornerstone. It is used both for helping Versium clients enrich data in their CRM systems, and by enhancing data sets that are used for training machine-learning models for scoring likely consumer behavior. Tracking consumers and commercial entities by name, employer, asset, and location, Datafinder can augment a company's CRM data such as email addresses, phone numbers, social media handles, mailing addresses, and other demographic financial, firm-related attributes (also known as "firmographics"), and other behavioral data. Versium built, acquired, and licensed data sets from a variety of public and private sources. The data set includes roughly one trillion entities in a table with more than 4,000 columns of attributes. While a portion of the data is sourced commercially from large data aggregators like Neustar and Experian, most of the data is sourced by Versium itself from the public domain using in-house technologies similar to those used by leading search engines. Additional attributes are sourced from government agencies such as state motor vehicle departments, tax agencies, and law enforcement, among other sources. Current position With a modest $4.3m from an A round of venture backing, Versium emerged out of stealth last year and has already drawn a customer base of 50+ customers Microsoft and Wunderman among them. As noted, Versium does not solve a new problem, but the key to its solution is its unique store of Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 3
consumer data, automated data processing, and machine-learning capabilities used for generating answers. Both are synergistic; the large data set provides the critical mass for Versium to train its predictive models. The biggest challenge for Versium is getting heard above the noise; the market for analytics tools for predicting consumer behavior is extremely crowded. Likewise, the data marketplace is similarly crowded. Acxiom (which is actually one of the recipients of Versium's data) provides an identity resolution service. Through acquisition, Oracle has entered this market through the Oracle Data Cloud, which provides consumer and B2B market data. Conversely, Adobe, IBM, and Salesforce offer analytics for marketing, lead tracking, and sales campaign management that overlap, but do not directly compete, with Versium Datafinder. Versium took an important step toward raising its profile with an OEM agreement that bundles Predict with each copy of Microsoft Dynamics 365 CRM. That provides each Dynamics 365 customer with the ability to integrate Versium's predictive scoring and Datafinder data service with Dynamics 365. Significantly, it complements a similar deal that Microsoft has entered into with Adobe Marketing cloud, for tracking web traffic. Being part of Microsoft Dynamics 365 CRM will provide the onramp that will attract notice for Versium. Data sheet Key facts Table 1: Data sheet: Versium Product names Predict, Datafinder, LifeData Product classification Predictive customer analytics Version number 2.0 Release date February 2016 Industries covered Consumer and business products and services Geographies covered North America, EMEA Relevant company sizes Mid to large Licensing options Subscription URL www.versium.com www.datafinder.com Routes to market Direct, OEM, channel partners Company headquarters Redmond, Washington, US Number of employees 30 Source: Ovum Appendix On the Radar On the Radar is a series of research notes about vendors bringing innovative ideas, products, or business models to their markets. Although On the Radar vendors may not be ready for prime time, Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 4
they bear watching for their potential impact on markets and could be suitable for certain enterprise and public sector IT organizations. Further reading The Customer-Adaptive Enterprise, IT0020-000234 (December 2016) "Voice of the customer and journey mapping tools need each other," IT0020-000246 (February 2017) The Augmented Customer and the Enterprise CX Opportunity, IT0014-003233 (February 2017) Author Tony Baer, Principal Analyst, Information Management tony.baer@ovum.com Ovum Consulting We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Ovum s consulting team may be able to help you. For more information about Ovum s consulting capabilities, please contact us directly at consulting@ovum.com. Copyright notice and disclaimer The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa Telecoms and Media Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trademarks, service marks or trading names of their respective owners, including Informa Telecoms and Media Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa Telecoms and Media Limited. Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa Telecoms and Media Limited nor any person engaged or employed by Informa Telecoms and Media Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa Telecoms and Media Limited. Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 5
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