LucidEra offers a web-based service that helps companies collect and analyze data across their internal software systems to make them more efficient, and has just raised $15.6 million.
LucidEra is another company in the somewhat crowded “business intelligence” industry.
These companies try to help a company’s management get a more granular, immediate view of factors affecting their business. For example, they show a sales manager how quickly potential clients are being converted into paying customers, and which sales staffers are being the most successful.
LucidEra is notable because it is one of the early leaders among startups trying to offer web-based or “on demand” business intelligence services (previous coverage) — it is also competing with other startups including Seatab Software, Host Analytics, and Oco. It collects data from a company’s systems, automatically checking for errors like duplicate customer accounts, then runs its own analysis of the data and produces live, online reports about what is happening in the company.
Cognos, Business Objects SA, Microsoft and others currently provide on-site hardware, software and consultants to help companies analyze data generated by their software systems used in their various departments. These companies already work with most Fortune 1000 firms.
LucidEra is targeting firms with annual revenue of $20 million to $500 million and 100 to 1,000 employees, says chief executive Ken Rudin. These smaller companies face multiple problems. Not only do they have to pay a lot to get the on-site software installed, they also need to pay extra IT costs to keep the software running once it’s installed, as well as pay consultants to keep analyzing the data for them, he SAYS [tells us].
Rudin says he saw the problem first-hand, while running his own business intelligence consultancy. His staff would go to a company, install hardware and software, then discover six months later that the system had fallen apart. One client at the time told him it was like “trying to manage a nuclear reactor when I just want electricity,” he says.
LucidEra began offering a “forecast-to-billing” service last quarter, aimed at improving a company’s sale cycle. The company didn’t divulge further details on growth and revenue.
The company says it isn’t concerned about the dominant business intelligence companies moving down-market. Its larger competitors have a difficult time turning their on-site technology into a web-based service, according to Rudin. The chief executive of Business Objects appears to agree, suggesting on this blog that his company is looking to make acquisitions.
Besides competitors, the biggest risk for LucidEra is that people still won’t use it: The rap on business intelligence is that it costs precious resources while sometimes delivering “reports almost no one reads.”
The market for web-based business intelligence services is roughly equal to that of web-based CRM software, estimates Crosslink Capital investor Peter Rip, or around $600 million, and growing 30 percent compounded for the next five years, he says.
The round was led by Crosslink Capital, joined by existing investors Benchmark Capital and Matrix Partners.
Rip will join LucidEra’s board of directors with this investment. Last month, he wrote a poignant blog post about deciding to invest in the company, calling the deal “love at first sight.”