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Using Hidden Intelligence to Create New Sources of Revenue

In the past, we would gather data to sell more tools. But selling tools to gather more data is proving to be a much more valuable prospect. SaaS (Software as a Service) makes the aggregate, dynamic, social and behavioral data about every facet of an online enterprise accessible, and smart companies today are working to leverage this hidden intelligence to create new sources of revenue. Hiding within the sum of all that data are rich insights that can be extremely useful with product development, identifying new market opportunities, enhancing enterprise productivity and revenue growth.

At Emergence, we believe the next wave of innovation lies in companies that are able to build business intelligence and not just tools. There will always be demand for actionable intelligence, especially when it’s something that your customers simply can’t do without. A winning data-driven enterprise makes itself indispensable.

What are people buying? What are customers looking for? What are consumers thinking about? What do online users respond to? These are questions a data driven SaaS enterprise can answer. Not by focusing solely on the business problem the SaaS tool or service addresses, but by mining the entire user base (aggregating the data) to understand how people are using the tool or trying to use it (behavior models), how well it is or isn’t working (benchmarking), and where it is most valuable (business insights). SaaS applications, versus traditional applications that are hidden behind a firewall or locked away in a remote storage facility, provide the access required to make this data mining process possible.

The quality of the SaaS tool or service is critical to building a data-driven enterprise, because customers need to be won-over before they are willing to share their usage data. Business intelligence can only be gleaned from understanding who does what, how often and why, within the application. It’s important to think about unique ways to cluster or combine the data during the aggregation process, because it is essential to creating value out of the information already at your fingertips. The best ways to create value and insights out of the data include:

  • Establishing a formal structure that federates the value of the data for your and other’s businesses
  • Architecting future development with these linkages, positioning aggregations as core to this capability
  • Applying the data (both internal and external sources) back into your services to constantly improve them
  • Creating a cycle: the more you know about your users the more you have to offer them

Data driven enterprises are successful because they build systems that help drive their customers to action. For example, using underlying metadata as a digital "flashlight" for showing customers options and actions they might not even have been considering. And ultimately, ascending from being solely a tool provider, to an industry wide expertise and ecosystem provider, for whom spend is not seen as nice-to-have, but rather as a must-have to stay relevant. A Grand Slam for any data driven enterprise.

Gordon Ritter, Emergence Capital PartnersGordon Ritter is a Founder and General Partner of Emergence. He has spent over 15 years building companies which pioneered new markets including embedded web-based interfaces, server appliances, "On Demand" services for the SMB market and web-native application development. He led Emergence Capital's first investment, in the On Demand leader . Gordon was named to the Forbes' Midas List of the top venture capital investors in 2007. He currently sits on the boards of Genius, Ketera, Lithium, PivotLink, SmartTurn, Veeva Systems and Zuberance.