The red hot BI and Predictive Analytics market is packed with top vendors on big time shopping sprees. Somehow I missed this bit of news at the time it was released. Running a business is a non-stop, 24×7 effort – I tend to be catching up on industry highlights now each Saturday. This morning scanning through my alert mail and news I saw the SAP + KXEN announcement.

Although I omitted KXEN in my earlier Practical Predictive Analytics blog – I did cover what SAP offered with regards to predictive in their offerings. KXEN is a GREAT buy for SAP.  KXEN has a state-of-the-art, partially automated predictive model building solution through InfiniteInsight® Modeler. KXEN claims through automation to build accurate models in hours, not the historical weeks or months type work effort. Their solution covers a broad array of data mining functions including classification, regression,  attribute predictive importance, segmentation/clustering, forecasting and association rules. In addition, KXEN has strong in-database predictive model scoring with added ability to apply SAS and SPSS models. That is a HOT feature! Soooo even though SAP  already had Predictive Analytic Library   PAL functions and some R integration in SAP HANA and their SAP Predictive Intelligence tool that supplements SAP Lumira (formerly Visual Insight) – the addition of KXEN is a fantastic buy that may get them to a  better place with their annual BI customer satisfaction surveys.

According to the press release, the market for predictive analytics software is estimated to be worth US$2 billion today and is expected to exceed US$3 billion in 2017.  It is finally time for predictive analytics to take center stage and be brought to the mainstream. I have been doing predictive analytic projects for  10 years now but they are almost always a rare gem find or something that I have suggested and had to first prove out to gain executive sponsor buy in. Usually predictive is an afterthought since so many companies still struggle with basic data needs today: cleansing data, getting data into a useful format for historical reporting and so on. The past two years I have seen more predictive inquiries than I saw in all of the last 10 years combined. Part of this is due to Cloud Computing, Big Data and various flavors of Hadoop adoption. Other reasons for the predictive analytic boom includes but is not limited to analytic maturity in organizations, younger talent entering into the workforce bringing  advanced analytic skills that they have learned in updated school curriculums, increased global competition in a connected world with no or low barriers to entry into many markets, and the total market fall out of 2008. I am ecstatic for the predictive analytics community because I have witnessed the power of predictive at work. It can make a huge positive impact when done right.

So back to SAP + KXEN and what this acquisition may bring. In the article, SAP mentions that KXEN is intended to complement existing advanced analytics from SAP. They will be adding it to  the SAP Predictive Intelligence workbench tool that snaps into SAP Lumira. SAP also intends on applying KXEN algorithms to  core SAP business processes within their industry focused applications for managing operations, customer relationships, energy, supply chains, risk and fraud. Embedding predictive analytics into core applications and business processes is a trend I expect to continue to see from ALL the software and SaaS application vendors. I am already doing some of this work today and see it growing steadily across all industries. Last but not least, of course SAP will integrate KXEN with SAP HANA. SAP is all about SAP HANA – you can’t go to an SAP event or talk to an SAP rep and not hear that H A N A word said a million times.  At SAPPHIRE and SAP TechEd there were pools on how many times it would be used in the event key note. We are smart people and tired of hearing one word repeated incessantly.  We get it.

Personally I am excited to see and play with the new SAP + KXEN predictive features when they are made available. I am not sure when we will start seeing this but I imagine we will learn more about it at the upcoming SAP TechEd in late October.