Omniture summit: CEO Josh James on what the future holds

22nd Apr 2009

Stuart Lauchlan speaks with Omniture CEO Josh James on why there is so much confusion over cloud computing, how the company is overcoming some glitches earlier this year and what's in store for the software firm.

By Stuart Lauchlan, news and analysis editor

Omniture CEO Josh James is an unusual beast. At a time when every man woman and PR person in the software game are falling all over themselves to stake a claim (however spurious) to being in the cloud computing business, James - who is completely qualified to make such a claim - chooses not to use the terminology at all.

"We've never been a company that's all about the buzz words," he says. "That's nothing against those firms that are good at making the most of them, but you know we were about the first cloud computing enterprise software firm in existence. We've been doing this since 1996. Back then, it was called remotely hosted software. Then it became ASP, then software as a service (SaaS), then on-demand. Now it's cloud computing. The reason we don't talk about cloud computing is that we work on the assumption that customers don't necessarily care what we call it, they just want it to work. They want the functionality and the ease of use.

"The reason we don't talk about cloud computing is that we work on the assumption that customers don't necessarily care what we call it, they just want it to work. They want the functionality and the ease of use."

However, he adds: "We have been one of the biggest contributors to the cloud. We have 17,000 servers working in the cloud, delivering SaaS from an enterprise standpoint. We're one of a very small handful of firms that can say that."

That said, there are a lot of firms who will make an attempt to say something similar. James concedes that the cloud computing terms might become a misused marketing weapon by some firms, but argues that the term is very open to multiple interpretation. "What does cloud computing mean?" he asks. "Does it mean that whether you're a consumer or a business you can get something done in the cloud? Does it mean that you're storing something in the cloud? Are you borrowing computing power from Amazon? Now that is in the cloud. Is Google in the cloud? In what way is Google in the cloud?”

There are firms who have previously not made cloud claims which are now gearing up to make significant investments in the sector, including firms such as SAS, which surely has the budget and the installed base to make a serious push into Omniture's comfort zone? "We are a $300 million company," says James, clearly unconcerned about this prospect. "Look at [SAS CEO Jim] Goodnight's business. He has a bigger business of course, but that doesn't really matter when it comes in terms of the amount of dollars that he can allocate to developing a competitive solution. Sure, they will - and when they do we will pay attention. But there is no company as focused on the marketing industry as us.

"We're not that big yet, so it just points out the greenfield opportunities that there still are for us out there. It isn't just about having data, it's about what you do with that data. It's about having an independent company that has an understanding of your needs, that's enterprise class and that has an online marketing suite."

They also want it to work, of course. Omniture had some embarrassing PR earlier in the year when an upgrade to its technology went wrong and caused latency problems with data for some of its subscriber base. With firms such as having suffered outages, are such glitches now an inevitable part of the cloud and just something that customers have to live with? "That whole thing was a perfect storm of a four to five day experience we had to work through, during which nine things in a row went wrong," explains James. "There was a bunch of human error that happened. We offer a good service level agreement and that's certainly something that customers should ask about of their vendors. We have a good uptime track record and it's not really an issue."

So do customers just have to get used to the occasional outage? Does it require a new mindset on their part? "It's only a new mindset for end users because they've never had access to this kind of data before," suggests James. "They are used to getting reports generated on a spreadsheet or printed on a PDF from the CIO's office. Anyone in IT or who interacts with IT knows that systems will go down, so for those people it's not a new mindset. The key is communication. People understand if you communicate what the problem is and set their expectations as to when, it will be fixed."

The next billion dollar firm?

A happier event from the past 12 months for Omniture was the formalisation of its relationship with media conglomerate WPP, which also took a stake in the company. As the big management consultancies such as Accenture and Capgemini get their own cloud practices into shape, James foresees a lot more partnering going on. "We see the WPP relationship as a real resounding statement about our company and relative to some of the competitors out there," he says.

"It's important to us to develop our eco-system of partners and to work with those partners. We work with big management consultancies but we don't have formalised relationships with them, although I think you'll see that change over the next 12 months. They have [SaaS] CRM partnerships but CRM is an older business – Siebel helped to establish the idea of consulting practices built around that. But the biggest customers of the consultancies are calling up and saying that they use Omniture and that the consultancies need to be more educated on it."

James was in London this week for the Omniture Summit, which saw 1000 delegates in attendance as part of an audience that has changed in nature and job function over the years. "We've gone from the web analytics people, through the online marketing to the general managers of online business," says James. "When we had our US customer summit, we had a chief marketing officer day and got several dozens of CMOs turning up. When we go into the largest companies now, we meet with the CMO.

"When I was at Davos earlier in the year, I met with the CMO at one of the largest media companies in Germany. He'd brought us into his company when he wasn't the CMO. Now they're losing their offline advertising and he gets credit for bringing us in in the first place. He's grown up into their CMO."

When he looks around for examples of best practice, James cites BestBuy in the US as a prime case in point. That firm used Omniture's offerings to pilot ways to make more money from interest free financing beyond the scope of current 'big ticket' purchases and into areas where a customer might spend more money at one time, but on a variety of products rather than a single large item. Such customers were previously not entitled to the financing offers. "They experimented with alternatives over the Christmas period and made tens of millions of profit out of the analysis of the data they gathered," explains James.

"There has been a lot of self-policing on privacy done by the industry based on consumer feedback. Legislation is never going to be able to keep up with technology evolutions."

He also admits to being a fan of social netwoking site Facebook. "It's a real utility for the end user, not just another site to go to and mindlessly blog about something. You have a real community and an opportunity to talk and tell people more about yourself. It's starting to become your online persona," he says. "The reason Facebook is so powerful is that it has relationships that go beyond work into the personal which means that it has an opportunity for genuinely targeted advertising like we've never seen before. If Facebook Connect takes off, Facebook will become the most powerful company on the web. The very fact that is a possibility means that every company out there needs to work out what their Facebook strategy is and go out and experiment with it."

But with some critics of social networking raising privacy concerns about the technologies, is it necessarily a boon to business? James reckons that concerns over privacy tend to sort themselves out. "People are not concerned about legislation but about what other people do," he suggests. "If consumers start to find that something is not to their liking, they let it be known. Nothing works without the dollars and they come from advertising, which comes from things that customers like, not things they don't.

"There has been a lot of self-policing on privacy done by the industry based on consumer feedback. Legislation is never going to be able to keep up with technology evolutions."

So what's next for Omniture? In the wake of Oracle's surprise purchase of Sun Microsystems, some market commentators are predicting a fresh round of consolidation and mergers. James concedes that acquisition could be a good use of some firms' cash reserves at a time when they're not producing a big return in the bank and admits that Omniture might tempt one or two predators. "We have always been an attractive target," he says. "We've thought that for a long time.

"We're just glad that people have left us alone. We thought that a business intelligence company would come along and buy us at one time, but they left it too late and we got too big. I would like us to be the next billion dollar software firm. There are only a few of those, with being the most recent. I would like us to do that."

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