SAP Buys KXEN
SAP announced today that it plans to acquire KXEN in a deal that will close in the fourth quarter. No purchase price was announced. Since one recently laid-off employee characterized the company’s prospects as “circling the toilet”, this seems like a case of bottom-feeding by SAP.
KXEN has struggled to position and sell its InfiniteInsight analytic software. The vendor’s black-boxy approach has little appeal for hard-core analysts, who prefer tooling that offers greater control over the analytics process. At the other end of the value chain, business executives are not interested in analytics, but in business solutions.
Hence, KXEN is neither fish nor fowl as a standalone company, but its technology is worth something to an enterprise vendor such as SAP, who say they will embed KXEN in applications for managing operations, customer relationships, supply chains, risk and fraud
KXEN has never been terribly forthcoming about details of its technology. The software is server-based, with database integration primarily through ODBC and PMML. KXEN has an established partnership with SAP Sybase, but for model scoring only in a “run-beside” architecture. SAP says it will integrate KXEN with HANA, but I suspect that will also be in a run-beside architecture, since KXEN adds little to SAPs’ in-database Predictive Analytics Library.
Update: Several analysts have commented on SAP’s move, including Curt Monash. Monash correctly distinguishes between analytic programming languages (such as SAS or R) and analytic applications such as KXEN’s InfiniteInsight. (There is a third category, which I call the analytic workbench, that is designed for users who have some understanding of analytics but would rather not program. SPSS Modeler is an example,)
Monash also rightly throws cold water on SAP’s ability to embed KXEN in business solutions, pointing out InfiniteInsight’s lack of tooling needed for risk applications. I’d go farther to say that KXEN has no credibility outside of Marketing Campaign Management, where SAP CRM is sadly stuck behind IBM/Unica, SAS, Neolane, Teradata Aprimo, Oracle and Pitney Bowes.