SAP to Resell NetBase SaaS-based Social Media Analytics App

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SAP has made another cloud-based deal, though this one a partnership and not an acquisition.

SAP announced this morning that it plans to resell NetBases’s Software-as-a-Service social media analytics application, which transforms Tweets, Facebook updates, blog posts and other social media data into near real-time analytics to help marketers understand the impact of marketing campaigns and customer buying patterns.

The application, which SAP will resell under the branding SAP Social Media Analytics, uses natural language processing and sentiment analysis technology to make sense of over 95 million social media posts per day, according to Byron Banks, SAP’s Vice President of Business Analytics Marketing.

NetBase employs 12 PhD-level computational linguists who have designed the application to understand and interpret social media language, including common shorthand, according to Lisa Joy Rosner, the company’s Chief Marketing Officer. Supporting the real-time analysis is a year’s worth of social media data NetBase has collected and stored in its own massively parallel database platform, called ConsumerBase. That data — roughly 30 terabytes — is used to give context to the real-time analysis.

SAP has bet its future on HANA, its in-memory database for processing and analytics structured data in near real-time, and the company is in the process of migrating its application portfolio to the new platform. But SAP lacked the tools needed to process and analyze unstructured data, the driving force behind the Big Data explosion. The new reseller agreement with NetBase will help SAP fill that gap in its offerings.

Still, SAP will need to further integrate unstructured data analytics capabilities into its application base to keep up with rivals IBM and EMC, as well as Hadoop-focused upstarts like Cloudera and Tresata.

An SAP spokesperson said the company is exploring ways to integrate NetBase’s social media analytics app with SAP’s BusinessObjects platform and ERP system, which could ultimately help SAP customers “correlate social media sentiment with key metrics like sales performance, service response times, and marketing events.”

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In addition to the analytics implications of the agreement, it’s worth noting that this is SAP’s second Software-as-a-Service focused deal in just a week. It’s apparent that SAP customers are starting to demand more cloud-based, on-demand offerings from the stalwart enterprise software firm, and SAP is responding. The challenge for SAP is providing SaaS-based offerings without cannibalizing its on-premise business. It must also integrate more unstructured data analytics capabilities into its existing, structured-data focused applications.

Neither SAP nor NetBase would comment on whether the reseller agreement is a precursor to an outright acquisition by SAP. The two companies have some but not many product overlap, and they share a number of high-profile customers including Coca-Cola.

About Jeffrey Kelly

Jeffrey F. Kelly is a Principal Research Contributor at The Wikibon Project, an open source research and advisory firm based in Boston. His research focus is the business impact of Big Data and the emerging Data Economy. Mr. Kelly's research has been quoted and referenced by the Wall Street Journal, the Financial Times, Forbes, CIO.com, IDG News, TechTarget and more. Reach him by email at jeff.kelly@wikibon.org or Twitter at @jeffreyfkelly.