I thought Omniture’s (news, site) recent Q1 2009 earnings call provided more insight into the company than past calls; perhaps this was the result of less than all positive news. Let's take a look.

The company’s posture in the past has been that it is building a moat around itself to fend off competition through the online marketing optimization suite it has been developing. The company continues to state that it doesn’t face real competition.

Economics as Competitor?

Says Omniture CEO Josh James, "Yes, from a competitive standpoint the biggest competitor we have announced is the macroeconomic environment. The other competitors that we have are more of a nuisance right now than anything; it's not something that really affects the relationship that we have with our customer. And most of the conversations around with our customers right now are just about the internal conflict that they have in their organizations, because they are having to cut people.”

Other quotes from Omniture that I found intriguing:

  • "…so it's not that we are seeing competitive pressure and people are migrating. It's more that they are losing resources in order to take advantage of that technology, and they are arbitrarily cutting cost across their organization."
  • "…we are seeing some customer attrition at the lower end as smaller customers lose resources to manage the data..."

OK, so Omniture is losing some customers at the low end. But do you believe it’s because of staff cuts and that these customers can no longer get value from SiteCatalyst because there’s no one around to manage the tool?

I don’t think so.

Google Analytics Nibbles on Toes

The elephant in the room is Google Analytics (GA). It is common practice for many organizations to run GA and cost-based tools in tandem and as there are cost pressures, there are smaller organizations moving to free solutions. And, staff cuts or not, many organizations -- large and small -- are not getting full value from their web analytics solutions because they are not demonstrating the value of analytics to the business.

So, while smaller customers may be on the most likely list to migrate to a free solution, the challenge to make web analytics relevant in any organization poses a threat to Omniture’s strategy for up sell within its product suite.

WebTrends, Unica Chewing at the Top Shelf

Omniture is also facing competition on the high end as former HBX customers choose other solutions.

There is a growing class of enterprises who are placing data integration high on their priority list and who want to control data locally. As a result Unica’s Affinium NetInsight and WebTrends are the solutions considered as on-premise alternatives.

The call featured some introspection that you should welcome if you’re an Omniture customer

  • "...we are going to focus on our customer base and product suite in place and defer some strategic investments and favor a predictable profitability metric until the environment improves and becomes more stable."
  • "...we are getting some commentary from the customers right now that there are too many sales people on an account..."

Focusing on the customer base and having too many sales people...interesting concepts. How do you think this will play out?