Is Your Brain More Valuable Than You Know?
***Update: May 2015
This article is now three years old. I’ve been gone from my last company now for more than two years, and the world has changed a LOT since then. We now have MANY options for publishing Power Pivot insight on the web, and I no longer endorse my former company as a hosting choice – we had, shall we say, religious difference over how to treat customers. That said, the idea of IaaS is more alive and viable than ever. More tech options for publishing = easier to get into the game.
A Hot New Industry that Could (Should!) Be Dominated By Excel Pros
I read an interesting article the other day about a new type of Cloud Business Intelligence dubbed “Insight as a Service” (IaaS).
If you’re a BI Pro I recommend you read it carefully. If you’re an Excel Pro I recommend you give it a quick skim just to get the flavor of it. It’s a good article. Well-written, thoughtful, and imbued with the author’s experience (and as a venture capitalist, his experience reflects a broad cross-section of industries and firms).
But ironically, I believe that IaaS is MUCH more relevant to the Excel Pro than the BI Pro. Most Excel pros are already in the IaaS business, but it just isn’t called that.
The Case of the Under-Utilized Brain
Like many Excel Pros, Jeff’s most valuable expertise is in something OTHER than Excel. He worked for many years specifically in the Consumer Packaged Goods and Retail industries, where his titles tended to be things like “Director of Sales” and “Vice President.” (If Retail/CPG management were an Olympic sport, Jeff would be expected to medal). His considerable Excel skills grew in parallel with his domain expertise, as a means to execute his domain expertise.
As his expertise and responsibilities expanded over the years, it was natural that Jeff’s analyses and reports (built in Excel) came to inform not just his own decisions, but those of his entire organization:
Does this Diagram Represent IaaS or the Role of an Excel Pro?
Domain Expertise Plus Ability to Execute = Everyone Relies on You
I think the diagram above “captures” what an Excel Pro looks like to the rest of their organizations. Most domain experts, when confronted by the raw data, have no idea how to turn that into actionable insights. So the Excel Pro in their midst feels like an absolute magician to them. Even though domain experts know (in some abstract sense) how to get from A to B, the toolset itself (whether Excel or otherwise) is often an intimidating mystery.
“Techies” are the exact opposite – the toolsets are their strength, but they typically lack the domain expertise. The detailed needs of the business, as well as the million little nuances of how things should and should not be calculated, are critical.
I’ve written before about this standoff – domain expertise on one side, tools expertise on the other – and how traditional BI projects bog down on the “dark matter” of the incredibly inefficient communication between the two camps. When you pay for a BI project, 99 cents of every dollar is actually spent on your domain experts educating the techies!
But traditional BI projects are actually quite rare. Few can afford them. So what normally happens is that your organization comes to rely on a member of the team, a domain expert who has ALSO become an Excel Pro. This combination of domain expertise and toolset expertise, in ONE brain, is where the world goes for the vast majority of its insights.
Back to the Under-Utilized Brain!
In the earlier phases of Jeff’s career, you can think of one of his roles as being an “Insights Engine” to the rest of his organization:
I think we can safely characterize most Excel Pros’ roles as being exactly that. While the traditional Excel toolset leaves a lot to be desired in terms of efficiency, security, etc., the combination of domain and toolset expertise – knowing precisely what you need and how to build it – still holds many advantages over BI projects with 6-figure budgets. This model has been here a long time and it’s not going anywhere. For good reason.
But Jeff realized something important about his situation: that the methods he had developed for Retail/CPG would be valuable to many other companies in that same industry. When he talked to friends and colleagues at other firms, he would often see that they were operating on much more simplistic and inaccurate metrics. And the data sets were very similar across firms, the domains were the same, and the problems virtually identical.
This is what Wall Street would call an inefficiency in the market. Jeff saw it as an opportunity.
So he co-founded a consulting firm to provide better insights to Retail/CPG firms. (It didn’t use the cloud though and was limited to traditional Excel analytics, so it wasn’t quite “real” IaaS, but getting closer).
A few years later, he realized that there was yet another opportunity to “scale up” and become even more efficient. So he left the consulting company, founded a new company, discovered PowerPivot, met me, and skipping to the end… we started a successful IaaS business for the Retail/CPG industries.
“Magic” for Team –> Insight “Power Plant” for an Industry
Above, I characterized Excel Pros as “Insight Engines” for their organizations. Well when you start to sell the services of an Insight Engine to more than one company, it becomes more of a Power Plant:
With PowerPivot and a Place to Publish,
Domain-Expert Excel Pros Can Serve an Entire Industry
The metaphor of power distribution seems particularly fitting. Originally, folks like Edison intended for everyone to have their own backyard electrical power plant, but that was incredibly expensive – it required everyone to invest in duplicate equipment. It wasn’t until they solved the riddle of efficient transmission over long distances that centralized power plants became possible, and electrical power became affordable on a broad scale.
Wait, I Thought You Worked at a Hosting Company!
I know, it’s a little confusing. Here’s a quick explanation. Yes, we have many customers of our Cloud PowerPivot hosting service. Some of them are using it to provide insight to their own internal organizations, and others are using it to power their own external-facing IaaS offering:
And yes, it’s about evenly split today between people using it for their own internal needs versus using it as a platform to launch their own IaaS offering.
For an example of a Self-Service BI customer running on our platform, see this newly-published case study from Microsoft, covering our customer BMD. For an IaaS example, see Black Label Strategies.
50/50 IaaS Already?
Does that 50/50 split surprise you? It has surprised me. Let me say it again: fully half of our Cloud PowerPivot customers are using the platform to operate their own Insight as a Service business.
Now, in hindsight, I guess it shouldn’t have surprised me. After all, Pivotstream originally built out our Cloud PowerPivot platform in order to launch our IaaS biz for Retail/CPG. It wasn’t until a year later that we started offering the platform to others.
So the diagram really looks like this:
The Company That Shall Not Be Named Offered the Cloud PowerPivot Platform
But Also Runs an IaaS “Side Business” On Top of It
It’s very satisfying, by the way, to be a client of my own platform. We walk miles in our Cloud PowerPivot customers’ shoes before they ever put them on. I’m a techie which makes me far too honest to have been a good salesman in my former career, so it’s a very positive change to now say that I trust my own business to the same platform I offer to others. Everyone who works in software should have this feeling just once.
Closing the Loop
The key takeaways I’m offering in this post are:
- IaaS is already a reality and not merely a future trend.
- Excel pros already operate IaaS “businesses” out of their cubes and offices today, it’s just not as efficient as the “real” IaaS business is envisioned.
- The combination of domain and toolset expertise in one brain is pure magic, and runs circles around traditional BI
- The addition of PowerPivot, and a broadcast mechanism like Cloud PowerPivot, dramatically lowers the cost of entry to launching an IaaS business, and does so for precisely the right audience – existing domain experts who know Excel
- On net I expect that the IaaS industry will be dominated not by big software or BI consulting firms, but by Excel Pros who have “turned pro” (or “taken their talents to South Beach”)
- Our Cloud PowerPivot customer mix at my former company already bore this out, with fully half of those customers operating their own IaaS business