A Business Analytics Engine that Began with the Military

Big technology companies like Netflix and Facebook make clever use of the digital traces we leave online: their algorithms can make connections between data and then offer suggestions about movies to watch or people to get in touch with. Now much smaller companies—even ones that don’t consider technology their specialty—might be able to do something similar. Several everyday business tools, such as customer relationship management (CRM) software, are gaining analytic functions that make it easier for any company to crunch the data now found everywhere—not just in customer records but also on the open Web, in contexts like tweets and online help forums.

The promise of this idea became apparent in April, when Jive Software, a company that makes collaboration software, acquired Proximal Labs, a startup founded just a year earlier. Jive wanted Proximal’s computer scientists, who had proved themselves in machine-learning projects funded by the Defense Advanced Research Projects Agency (DARPA).

Proximal founder David Gutelius says the DARPA work involved analyzing online discussion forums, wiki pages, and U.S. Army documents that had been uploaded to a central system. Gutelius and colleagues built a program that analyzed “explicit signals” about the importance of each data point—such as opinions expressed by users of the system—and “implicit signals,” such as how often an individual was mentioned in conversations about a topic. The more the program learned about the Army, the more sophisticated it became in its suggestions. For instance, in one demonstration at West Point, Gutelius says, he and his colleagues were surprised to see it suggest a certain man as an expert in improvised explosive devices. This man—Gutelius identified him only as “Neal”—didn’t seem to have worked much with IEDs, at least when he used the Army intranet. “But in walks a group of captains that just came back from Fallujah. They looked at the screen, and one of them just yelled out “`Neal!’” Gutelius says. Apparently, the system was able to detect that people in Iraq trusted Neal’s expertise on IEDs, although his experience might not have been instantly apparent.

Now Gutelius hopes to extend these principles to businesses. Just as Google ads might suggest a baby swing when you type “Gerber” in an e-mail, technology from Proximal Labs might suggest the best employee in an organization to answer a certain customer service call. Or it could indicate that a longtime client would be more interested than others in a product coming to market.

These functions aren’t available quite yet: Jive plans to add some Proximal features to its software in June and roll out more later. But even a few years ago this wouldn’t have been possible unless an organization had the computing power of a company on the scale of Google or Yahoo. In the past few years, an open-source project called Apache Hadoop, which is especially geared toward processing “big data,” has made it much easier for startups such as Proximal to offer advanced analysis capabilities to their customers.

Jive’s competitors have also been swallowing providers of analytic technology. Kana, a maker of customer service software, bought the social-media monitoring company Overtone this April, and a similar company, Radian6, was acquired by Salesforce.com in March. Yet data on social-media sites represents just a small subset of the digital traces that companies can make use of. Brian Roddy, Jive’s senior vice president of engineering, notes that companies could start by mining e-mail or information from CRM tools more effectively. Once that happens more regularly, Roddy says, “big data” will lead to something that “everyone can benefit from.”