An Interview with Revolution Analytics CEO Norman Nie - Part 2

Steve Miller, Information Management Blogs, May 6, 2010

With an enthusiastic world-wide user base estimated at 2M and a stranglehold on academia, there's no doubt that the future for open source R Project for Statistical Computing is bright. Yet even with this largesse the challenges for commercial R purveyor Revolution Analytics (formerly REvolution Computing) are significant.

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The business model is different today for now-established commercial open source BI vendors like Pentaho and Jaspersoft then it was five years ago. At that time, their primary offerings revolved on product support and validation, the commercial products very similar to the freely-available community editions. Now, the vendors deploy a "freemium" strategy that markets a highly-differentiated "enterprise edition", with critical features available for paid subscription only. More, the innovation trajectory for enterprise is increasingly diverging from community. Commercial open source with these vendors now seems increasingly proprietary.

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Steven Miller: Statistics and analytics are now front and center for business. SAS remains the 1000 pound gorilla, while IBM purchased SPSS, making it a center piece of the "Smarter Planet" strategy. And analytics are central to BI software leaders Oracle and SAP as well. How will this attention help Revolution Analytics? Will a rising tide lift all boats? How will Revolution and R differentiate?

Norman Nie: I believe it's today's data deluge that's lifting all boats. That, combined with an explosion of computing power and the growth of modern database query languages, has changed the game for predictive analytics. 40-year-old legacy products cannot keep up.

That's where Revolution comes in. First and foremost, we will differentiate ourselves enormously from our competitors on pricing models. Revolution R will be a superior product at a much lower price, and there is a definite market for that. Much of SAS's revenue comes from recurring renewal fees - not new installations. There are a lot of customers locked in with no other options right now.

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