Get Ready for Web-Housing - 30 Dec 1999

Anyone who has followed the phenomenal success of Internet-centric initial public offerings (IPOs) this year knows that eyeballs captured is the only metric that seems to matter right now. Investors don't seem to care whether a company is profitable today, only that the company might be amazingly profitable at some point in the future. Traditional yardsticks of financial success aren't applicable in this world, so people focus on how many eyeballs the site can capture. An Internet company might become profitable in the future if it can figure out how to stay alive long enough to capture a significant piece of the customer base in its market. If it captures enough customers, profits will come.

Capturing eyeballs in the Internet world is nothing more than an exercise in customer relationship management (CRM)—-how effectively a company manages, shares, and leverages its knowledge about its customers. CRM is about understanding your customers, then using this knowledge to enhance the customer experience and make the business more successful. And for now, the number of eyeballs your Web site controls often measures success in the Internet world.

Unfortunately, many Internet businesses are flying blind when it comes to understanding customer behavior on their Web sites. They are collecting gigabytes of customer click-stream data each day, but they have little ability to analyze this information to capture new eyeballs and help keep the ones they already have. Fortunately, companies can collect, store, cleanse, manage, and analyze customer Web click-stream data, which customers generate with each Web click. By analyzing customer click-stream data, companies can learn much about customer behavior and, consequently, can boost the effectiveness of their Web property and business. This practice, often called Web-housing, combines Web data and data warehousing.

To meet the Web-housing need, Microsoft launched its Business Internet Analytics (BIA) program, which provides insight into the effectiveness of Web site content and product positioning and advertising. BIA will offer closed-loop personalization, which will help Web businesses discover cross-selling. And, most important, BIA will help companies learn about their customers in near realtime, allowing Internet companies to alter their content and site navigation based upon customer trends identified the day before.

BIA is part tool and part methodology. Not surprisingly, BIA tools include SQL Server 7.0, OLAP Server, Site Server Commerce Edition, and Office 2000. Microsoft and its partners developed the methodology based on experience they gained during a BIA project called iDSS, which Microsoft implemented internally for products such as Hotmail. Today, BIA helps Microsoft glean information from more than 1 billion Web hits per day, spread across more than 500 servers, and generating more than 200GB of daily log files.

Is BIA something you should be interested in? You bet! Econ 101 and the rules of supply and demand dictate that e-business intelligence will be one of the hottest IT specialties for the next few years. The demand? In case you haven't heard, all businesses want to be e-businesses, which will require them to have a strategy to Web-house their customer data. According to Gartner Group, 50 percent of large companies will have an e-business intelligence strategy by the year 2002. The supply? Today, few IT and business experts have a deep understanding of business intelligence and data warehousing. Even fewer people have experience applying business intelligence and data warehousing techniques to click-stream data analysis. What does that say about the prospects for e-business intelligence specialists?

If you're interested in learning more about Web-housing, check out Ralph Kimball's newest book, The Data Webhouse Toolkit: Building Web-Enabled Data Warehouses, which will be available in January.

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