SaaS BI player LucidEra to call it quits

Monday's rumor that on-demand business intelligence provider LucidEra was shutting down has turned out to be true.

I received a number of pitches from competitors about why their solution is better, cheaper, etc., and one particularly well thought-out e-mail from Brad Peters, CEO of Birst, another on-demand BI provider. I've pasted the e-mail below with permission and it will end up on their blog sooner or later.

My understanding is that while LucidEra's shutdown is unfortunate and a bit of a drag for customers, there are multiple providers that customers can easily switch to and that LucidEra are being helpful with the data transference.

LucidEra, right and wrong

It's always unfortunate to see a fellow startup shut its doors, even when you compete with it, since strong competition validates an overall concept--in our case, on-demand business intelligence. The benefits are real. The value to customers is real. Unfortunately for LucidEra, their particular approach--specific applications, instead of general BI solutions--proved weak in the marketplace.

What LucidEra got right:

• LucidEra was a strong evangelist for why on-demand can be a faster, lower cost, and more effective option, and the industry is better off for it.
• LucidEra understood that for many companies especially small and mid-size, having a solution that can be up and running quickly is very important. Companies want answers as quickly as they can, and if given the choice between an expensive, time-consuming deployment and a quick one, they'll pick the quick one.
• LucidEra also understood that where BI can be most powerful is at the point where it really impacts the business--at the front lines, like the sales team.

What LucidEra missed:

Customers want full-fledged BI made easier, not simplified applications.
LucidEra's solution to the customer need for quicker and easier BI was to offer applications instead of a true BI solution. This meant a standardized data model approach and standardized reports. This approach requires customers to adapt their business problem to the LucidEra solution, when what customers really wanted was a quicker, easier solution that fit their particular business needs.

The ability to handle multiple data sources matters.
To simplify deployments and deliver quickly, LucidEra started off focusing on Salesforce.com data only. However, customers often wanted to combine that data with information from other systems, like their marketing, finance, and operational systems. While LucidEra started moving in this direction later, it prevented them from getting crucial customer momentum when they needed it.

Customers want the flexibility and power of true BI.
While customers like rapid deployments, they also want to know that the system is powerful enough to answer spontaneous business questions or identify and address unusual trends as they arise--all things which you can get from a traditional BI solution. And they want a system that will grow with them as their needs grow.

If you wanted something other than that standard report, how easy was it to get there? It appears that they didn't have a strong answer for that. There are a lot of components that go in a true Business Intelligence solution--LucidEra was hoping that customers would be willing to sacrifice power and flexibility for speed and low cost. It seems that customers want the power along with the speed and low cost.

There are other options out there
There may be some industry naysayers out there who will wave LucidEra's demise around as a flag of surrender for the overall on-demand business intelligence space. I think that this is shortsighted. While LucidEra may be an example of why overly targeted BI applications don't have a large enough market to survive, it is not a harbinger of doom for the overall on-demand BI industry.

There are other vendors out there, Birst being one, who offer the speed, low cost, flexibility, and scalability that customers demand. They are thriving because they are doing right what LucidEra got right, and they are also providing the pieces that were missing.

(Note: I made minor edits to the e-mail for blog purposes.)

Follow me on Twitter @daveofdoom.