Analysis: Microsoft, Oracle Data Expected to Increase Integration of Data Mining and CRM

Database marketers are cautiously optimistic about two data mining announcements made over the last few weeks by software giants, Oracle, Redwood Shores, CA, and Microsoft Corp., Redmond, WA.

Oracle announced that it has purchased the assets to Thinking Machines, Waltham, MA, and will offer integration between its database platform and data mining software. Microsoft, meanwhile, is gearing up to create a standard by the second half of this year that will allow data mining software providers to link their programs to Microsoft's OLE DB and ultimately, to Microsoft's database platform, SQL-Server.

Microsoft's standard is expected to address the concern among database marketers that data mining tools don't work directly with the source being mined, but first require the data to be exported — usually into flat file — and then reformatted to match the requirements of a specific data mining tool. This has hindered the tight integration and coupling efforts between complementary decision support products and also has hindered the ability of data mining tools to work directly with CRM application systems. In a similar fashion, the data mining tools that Oracle has acquired can be combined with Oracle Reports, a reporting tool, to give the company a complete line of decision support products, thus allowing Oracle to offer one-stop data warehouse shopping.

“Bringing some of the data mining functions into the database may help the end-to-end performance of the database system,” said Henry Morris, a data mining analyst at IDC, Farmingham, MA. “The system may be easier to run since there will not be a need for separate tools, separate files and separate data structures.”

According to Morris, however, the announcements do not yet fully address how to apply data mining to business problems.

“If you want to see broader adoption, you need to see more data mining applications,” said Morris. “And until the data mining vendors, the application companies and the customers that are building the data warehouses decide who they are going to support and put their money into, that is when we will see success rates.”

The key for Microsoft is how well its database platform, SQL-Server, will scale, said Pat McHugh, vice president of marketing of Exchange Applications, Boston, a campaign management firm, whose flagship program, Valex, works together with other data mining and reporting tools. This is emphasized, he said, because Microsoft's focus has not, historically, been on large data warehouses, and most of his firm's clients and prospects have databases near or above a Terabyte.

As for Oracle, “the key is how well they can integrate technology outside of their core competency,” McHugh said. Fifty percent of Exchange's applications are on Oracle's database.

NCR is expected to announce another data mining tool at the end of the month called TeraMiner Stats, which will move much of the data mining process inside NCR's Teradata databases.

“By moving this processing inside the database, you will have a large database platform, a very powerful database engine, and you are allowing that engine and that platform to perform much of the work, as opposed to traditional data mining tools,” said Todd Higginson, NCR's Teradata marketing manager.

Meanwhile, more companies are entering into the fray, offering integrated data mining and data warehouse capabilities.

Sybase Inc., Emeryville CA, and Unica Technologies Inc., Lincoln, MA, announced an agreement last week to create a platform for data mining and campaign management.

According to Sybase, Unica will provide data mining and campaign management software and services to complement database access provided by Sybase's Adaptive Server 1Q (12).

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