Why the future of software is all about analytics, analytics, analytics

Any company that wants to sell software to enterprise in the next few years might be wise to start thinking about data. That doesn’t mean becoming a “big data” company, per se, but at least thinking of what metrics your customers need tracked and how to deliver that information to them.

At least, that’s what I took away from two early sessions from our Structure: Europe conference that took place Sept. 18 and 19 — two sessions that we’ve packaged up into this week’s Structure Show podcast. I led one of the discussions, joined by Kleiner Perkins general partner Michael Abbott and North Bridge Venture Partners general partner Jonathan Heiliger. We spoke about applying the lessons they learned leading technology development at Twitter and Facebook to enterprise data centers and to evaluating software startups.

My Structure Show co-host Barb Darrow led the other session, speaking with New Relic Founder and CEO Lew Cirne (both of whom are pictured above). As you might well know, Cirne has built a juggernaut with New Relic, the application performance management service that achieved critical mass with developers thanks to its deep analytics capabilities and is now poised for an IPO.

Here are some highlights of what they had to say about the importance of analytics, but you listen to the whole podcast (download options are at the end) to get all the insight with none of the requirements of staring at a computer screen watching the video. (Note: These quotes are from an automated transcription, which might not be entirely accurate.)

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Cirne on New Relic’s business model:

“I’ve given some hints that we’re going to help deliver more business value out of the data we collect, and we’re collecting 5 billion metrics a day. We have the click streams of 60,000 apps. Think of what that can do if we’ve got that cloud hosted and we can do more than tell you about response times. …

“… The hard part of what we do in APM is we collect an enormous amount of data that’s hard to get, and then we make sense of it in a simplified way. That’s not easy to do and we’re good at that. So we want to take that domain expertise and apply it to a broader set of problems.”

Jonathan Heiliger North Bridge Venture Partners Michael Abbott Kleiner Perkins Caufield & Byers StructureEurope: 2013

Jonathan Heiliger (left), Michael Abbott (center) and Derrick Harris (right) at Structure: Europe: 2013.

Abbott on the promise of big data and following in Twitter’ footsteps:

“As an example, investments that both Facebook and Twitter have made around business intelligence or self-service, from being able to ask questions of your data, makes a great deal of sense. I think there’s many companies in the Fortune 1,000 that would love to have that type of ability for IT to enable non-technical users to be able to ask questions of their information. …

“… In today’s world, you can start with [a] question, but you can actually have subsequent questions as a result of that first one. That’s actually real important as part of that whole discovery process to get more ROI out of the investments you’re making in big data.”

Heiliger on the high-speed, high-resolution analytics:

“I think every enterprise can benefit from more resolution on data and much higher frequency access to data. Where I think the norm a few years ago was, ‘Hey, I’ll wait 24 hours for that report. I’ll wait a few hours for that report.’ Or something like that.

“Whereas, the Internet companies of today — Facebook, Twitter and other large Internet companies included — push the envelope because there are so many decisions you can make in real time for user experience that improve the user experience and improve the interaction that people will have with those products that can also be translated to the BMW website and how you work with the car configurator, how performant that application is. Also, quite frankly, how it can be tuned to what you’re doing at that moment and time, and being able to take into account as many different signals from different sources of data — whether that’s happening in the browser or on a back end system — is super critical.”

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