Are subscription based / licensed analytic companies on their way out? 04-16-08  1:17pm

Yahoo recently announced that they have agreed to acquire IndexTools (a web analytics company) and start offering this service for free, much like Google analytics and Microsoft's' fledging 'Gatineau' analytic service. Does this essentially spell the end for all of the commercial analytic services out there? I suppose the real question is "What compelling reason do I have to continue using / paying for a service when it is offered for free?" IndexTools claims to offer "80% of the functionality of Omniture for FREE!" This is a compelling statement, and we all know that competition breeds innovation, so with Microsoft, Google, and Yahoo competing in this 'free analytics' market, the consumer is poised to benefit to the point that we may see 100% of the functionality of Omniture. (Assuming the aforementioned companies offer server log analytics as well).

What will the future hold for commercial/subscription analytics companies? Will they develop a new service as a value add that compels the customer to keep paying you for your services... and hope that the big three don't do what they do best and re-engineer your service and offer it in short order with their free versions? Diversify their offerings and sell a bigger more comprehensive management suite where analytics is only a small part of the bigger package? Hope to god that you are bought out by one of the behemoths and spend the rest of your days sipping piña coladas on the beach?

Either way it will be interesting to see how things pan out, but in the end, we as the consumers will be the ones who benefit.