Tips + Tricks

Creating Competitive Differentiation with Embedded Analytics

By Alvin Wong
Share on LinkedIn Tweet about this on Twitter Share on Facebook

Data and analytics is a disruptive force in all products and services, serving as a basis to create new businesses and upend existing business models. All businesses today capture data in some way, but the true value for the end user comes from the ability to analyze the data collected.

For example, look at popular technologies such as Nike Fuelband or Fitbit. These wristbands are equipped with sensors that monitor your activity, and once the data is synced to their cloud, you are able to analyze your activity and compare against your friend’s activity. These products are growing in popularity. The introduction of personal health data is changing how people think about their health.

Sensor technology is used extensively in hospitals as well. Versus Technology provides technology to hospitals, enabling them to physically tag all assets and people in a facility with an RFID tag. This allows sensors throughout the hospital to track all pieces of equipment, hospital staff, and patients. The reporting and analysis of the data enables doctors and administrators to easily understand the flow of equipment, improve patient experience through wait time analysis and actual consultation times, as well as increase utilization of existing equipment. [Learn more here.]

The importance of analytics is well known among software and SaaS providers. 94% of software providers believe embedded analytics in their application helps them create a competitive differentiator, as we found in our State of Embedded Analytics Report where we surveyed software providers at large.

On one hand, this differentiation comes from having the right capabilities and by focusing on ease of use, which is a general tactic when developing any product. On the other hand, this differentiation also comes from how analytics is embedded into the application. What our survey also found is that embedding analytics deeper within the application and user experience increases the likelihood of competition differentiation.

Here are two companies that exemplify this approach and the affect it has had on their business: 

1. Amazon is well known for having a wide selection of products, 1-click purchasing, and fast delivery with Prime. Coupling all of these transactional capabilities with embedded data in form of product reviews and suggestions placed directly alongside the “Buy Now” button, not only do they create a consumer friendly experience, but they truly eliminate the need for you to interact with a sales person or product expert at all. How they ultimately beat traditional retailing and upended that business model is through embedding relevant data at the point of sale.

2. Kayak empowers users to comparison shop for travel itineraries and begin the booking process from their search. Every time a user initiates the booking process, they collect a lead generation fee for the referral. Kayak has built an entire business model on presenting the relevant data in order to initiate transactions. They were fortunate enough to IPO in 2012 and be purchased by Priceline in 2013.

These two examples highlight the power of embedding analytic capabilities with the transactional or functional capabilities of an application. Our survey finds that 91% of those software providers who make analytics a core part of the user experience and user workflow strongly believe that embedded analytics helps them create a competitive differentiator. We call this form of embedding “Infused Analytics” because analytics is a core part of the application, where it is an integral part of the user experience and workflow.

Download the State of Embedded Analytics Report here.


Originally published March 4, 2014; updated on August 9th, 2017

About the Author

Alvin Wong has an extensive background in solution architecture and implementation of SaaS and business intelligence applications. Alvin earned his MS in Engineering Management from Stanford University and BS in Electrical Engineering from Cornell University.