Data Wildcatting

By Javier Rojas, Managing Director, Silicon Valley office, Kennet Partners

Like oil barons drilling into unexplored grounds, technology companies are finding ways to dig deep into web-based data silos in order to extract value from seemingly unrelated information. This “data wildcatting” is poised to expand greatly in 2008 and beyond as the industry moves from mere transactional systems to more sophisticated data analytics and business information solutions.  
 
But why now?  We're at the confluence of massive data availability and demand for adding value to that data. Data is much more accessible than ever before – either in structured relational databases or unstructured form via web-based interfaces. And growing use of the Internet facilitates easy access to both types of data.  With more data available, there is a need to understand how it relates to other data and how it can be used to generate operational efficiencies, eliminate risk or increase profits. For this activity, transactional systems simply won't do.
 
The key is to understand where to mine for value in the data and how that translates into new services and profit growth opportunities. Another critical factor is the incorporation of knowledge workers, who can apply their expertise to extract even more useful information from the data collected.
 
Data analytics is increasingly vital in vertical markets, particularly in business-to-consumer and service industries where there are numerous transactions. Data analytics enables users to gather customer data across all interactions, and add value to it, which results in improved sales, a quicker road to profitability, reduced expenses and/or new applications to drive revenue. Examples of early leaders in data analytics for vertical markets include MedeFinance Inc. and Kapow Technologies.  
 
MedeFinance is a leading provider of managed, hosted on-demand business analytics designed to help healthcare organizations improve financial and operational performance. MedeFinance's applications are used by more than 700 healthcare organizations in the United States and United Kingdom – including Kaiser Permanente, Tenet Healthcare Corp. and Blue Shield of California. The company's analytical dashboards help these customers reduce bad debt and better focus their operations – a service that is clearly in demand based on the company's 10x growth over the last three years.
 
Kapow Technologies, an expert in mashup serving and the undisputed leader in harvesting unstructured and structured data from the web, is one of the fastest-growing software firms and the product of choice for Web 2.0 companies integrating data from other sites. This is largely the result of Kapow's ability to collect unstructured data across web-based interfaces. Kapow's unique, patented visual scripting language enables faster integration of existing web applications and enables users – including AT&T, Bank of America, Intel and the U.S. Army, to name a few – to unlock and repurpose data from valuable web and enterprise data sources.
 
While companies such as these have proven that there can be “black gold” hidden within enterprises data sources, there are some potential psychological hurdles to leap before such solutions achieve widespread adoption. For instance, many managers simply rely on their gut reaction when it comes to making business decisions, rather than establishing a plan based on hard facts. But once they discover how data can be effectively managed and analyzed to produce tangible results, it will be difficult for them to deny the importance of data analytics.
 
About the Author
Javier Rojas is a managing director at Kennet Partners and leads its US investment activities. He is currently on the board of Daptiv, Adviva, IntelePeer, NetPro Computing, MedeFinance, and Kapow Technologies. Prior to joining Kennet, he was a managing director of Broadview International and led their West Coast Software and Services practice. Javier specialized in advising high growth, early-stage companies on how to capitalize on emerging technology markets and partnering opportunities. He invested and/or advised on a number of successful companies and high value exits including Etek, Webex, Looksmart, Blue Mountain Arts, When.com and Rightworks. Previously, Javier was with Morgan Stanley. Earlier, he founded a software firm that developed products for capital markets interest rate and currency swap traders. He holds an MBA degree from The Harvard Business School and a BAS degree from Georgetown University.