UNDERSTANDING WATSON ANALYTICS

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1 R E S E A R C H N O T E D O C U M E N T P A u g u s t UNDERSTANDING WATSON ANALYTICS A N A L Y S T S Anne Moxie, Rebecca Wettemann T H E B O T T O M L I N E IBM Watson Analytics effectively leverages more than a decade of IBM s analytics experience to provide value to customers by broadening the reach of analytics within an organization. This lightens the burden on data scientists and business analysts by removing them from ad hoc analysis requests. Nucleus finds that Watson Analytics differentiates itself from other user-friendly solutions with predictive functionality and natural language understanding, and expects that IBM will continue to add to its capabilities with machine learning. D E F I N I N G W A T S O N A N A L Y T I C S Clearly defining its growing list of analytics products will help IBM avoid market confusion and assure its ability to attract and retain users. Watson Analytics was named after the supercomputer, Watson, because of the shared natural language capabilities. Followers of the Watson brand may recall its debut on Jeopardy! where it leveraged machine learning, statistical analysis, and natural language processing to win against its competitors. IBM Watson is built with more advanced big data and analytics processes in mind, where Watson Analytics is built for business users. Although Watson Analytics does not yet utilize machine learning, Nucleus expects that it will be incorporated as the product matures. Watson Analytics is a user-friendly data discovery and visualization tool and is available in three versions free, personal, or professional. Its interactive data exploration allows users to rapidly perform ad hoc analysis of their data and at the same time automatically suggests other areas of inquiry for the user to explore. Some of its other features include: Nucleus Research Inc. 100 State Street Boston, MA Phone:

2 Refine. Users can load data and do their own lightweight data cleansing and transformations and see their data quality score in real time, as well as create custom data groupings. Predict. A predictive modeling tool that provides statistically relevant insights into data. Assemble. A reporting tool that provides customers with dashboard templates to allow them to quickly develop and share important information. Watson Analytics is built for business users in order to support a user base beyond the data scientists and analysts who currently use IBM Cognos Business Intelligence and IBM SPSS Modeler. From a design perspective, users should think of it as a Tableau-like layout with interactive graphics and visualization capabilities that allows a range of users to more easily digest analyses. A key differentiator for Watson Analytics is its natural language recognition, which allows users to perform an analysis as if they were asking a question. WATSON ANALYTICS OFFERINGS Free Personal Professional Price $0 $30 $80 Number of users or more Upload delimited files and Excel files X X X Access to more sources of data X X Access to social data from Twitter X X Connect to IBM Cognos report data Share datasets, refined datasets, explorations, predictions and views X X With Watson Analytics, companies can enable business users with analytics tools to improve decision making without increasing licensing fees. Several business intelligence (BI) vendors are moving to offer free or reduced price products to broaden their appeal. This trend is in line with Nucleus s prediction that market pressure would force vendors to seek ways to increase their relative value (Nucleus Research o270 Nucleus Research Top Ten predictions for 2015, December 2014). E V A L U A T I N G W A T S O N A N A L Y T I C S Nucleus found that Watson Analytics generates value for its users by democratizing the use of analytics. IBM has been lauded for its success regarding its heavy-lifting analytics capabilities and with Watson Analytics it is able to bring much of this Copyright 2015 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 2

3 functionality to a new user base that is increasingly demanding more advanced applications that won t sacrifice usability. DATA EXPLORATION AND DISCOVERY After the New Year, IBM provided Watson Analytics users with NFL 2014 regular season data. Having a cleansed dataset allowed Nucleus to test the solution under ideal circumstances and we found it to be intuitive and capable of quickly pulling insights from historical information. In particular, a major benefit to users is the recommendation feature that suggests insights based on the most relevant correlations in the data that Watson Analytics automatically detects. If users desire additional insights, they can drill down into automatically generated graphics, or can leverage the natural language query tool to search for answers. FREEMIUM PRICING STRATEGY The Watson Analytics free version offers companies an immense advantage in new analytics deployments. Historically, organizations have been hesitant to invest in new analytics solutions because it can be hard to prioritize against a list of competing projects. There is a growing population of departmental technologists who are defined as business users who may not be highly trained in technology, but have grown up using it and are often the go-to technology resource for their teams. In addition, departmental technologists are generally more aware of new technologies than the average employee and are likely to reach out on their own to explore the benefits of new solutions. Recently, this generation of employees has been taking over more influential roles in their organizations and, as a result, they are providing new opportunities for vendors (Nucleus Research o191 Understanding the marketing technologist, August 2014). By offering Watson Analytics as a lightweight free option, these more technically inclined employees are able to explore the solution with minimal commitment and can test the effectiveness of Watson Analytics on their own. After experiencing the free version and its benefits, they can present Watson Analytics Personal or Watson Analytics Professional to their team as a suggestion for purchase, which will provide them with significantly more capabilities. This will scale out IBM s sales resources and help it access more deals with less effort, by encouraging potential customers to test drive the solution at will. ARMING BUSINESS USERS In addition to reaching business users through the free option, Watson Analytics also ensures accessibility through visualization and self-service functionality. Since business users do not have the time to spend in analytics applications to analyze the Copyright 2015 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 3

4 data, they need a solution that can quickly provide them with insights. Watson Analytics achieves this by automatically generating analyses based on correlations that the system detects from the inputted data. For a more specific analysis, users can ask Watson Analytics a question, similar to how they perform Google searches, and the system leverages its natural language understanding to provide an analysis that answers the question. Nucleus found that Watson Analytics generates value for its users by democratizing the use of analytics. To further promote usability, the results from the analysis are displayed in a visual format that enables users to quickly glance at graphics to decipher insights. Being built for ease of access from a business user standpoint is a key difference from SPSS Modeler and Cognos Business Intelligence, which provide a more advanced level of analytics. NEXT STEPS IBM is putting investments into a mobile application for Watson Analytics, which will provide users with an entirely new style of access. Nucleus expects that this will increase daily use of analytics applications by at least 25 percent. This is due to the fact that business users do not live solely in analytics applications, therefore they are more likely to take advantage of Watson Analytics on a mobile screen other than their desktop. Since the use of an analytics application is optional for business users, accessibility is key to encouraging adoption and increasing productivity. Ensuring that users will use the applications regularly will help organizations experience a higher ROI from their deployments. C O N C L U S I O N Watson Analytics rounds out IBM s business intelligence portfolio, which includes Cognos BI and SPSS Modeler, for heavier analytics users and effectively utilizes the natural language functionality that was pioneered by IBM Watson. IBM has put significant R&D into analytics tools and, by bringing these capabilities to business users with Watson Analytics, is able to distribute its functionality to a larger user base. As a result, Nucleus has found that Watson Analytics drives an accelerated time to value. This is largely due to the ease of use and accessibility, which allow users to more quickly adopt and leverage the tool for insights. Copyright 2015 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 4

5 The challenge lies in IBM s ability to clearly define Watson Analytics within the company s growing portfolio of analytics solutions. It is also important for users to have access to usable datasets and, moving forward, IBM would benefit from providing wizards for dataset acceleration or to offer common enterprise streams. However, combining Watson Analytics advanced level of functionality with improved ease of access and understanding, IBM will draw business users to its solution and retain them with its usable experience and results. Copyright 2015 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 5