Customer management software applications are the leading edge of digital transformation, a movement to make digital information more actionable, notes tech sector expert Jon Markman, editor of Strategic Advantage.
Alteryx Inc. (AYX) makes a software platform for data scientists. It allows them to plug in data, often without coding, build models and get actionable insights fast. The secret is the platform sets in the middle of the data analytics stack. Digital information in a variety of formats and from multiple sources, can be plugged in and made useful.
In the beginning, the company made a name for itself helping large companies like Amazon (AMZN), Ford (F) and Coca Cola (KO) find market inefficiencies. However, the software quickly became a useful as a tool for investment companies analyzing derivatives.
Professional sports teams, like the Dallas Cowboys and Green Bay Packers, use Alteryx to perform player analytics. And that platform has become a must-have instrument for retailers trying to make sense of data coming from storefront point of sale systems, e-commerce, and from digital influencer campaigns.
Alteryx lets users suck up data from companies like Tableau, a firm that makes low level digital information intelligible. That data is deployed to predictive analytics and machine learning algorithms, without writing any code, then pushed out to higher level consumption applications like Adobe (ADBE) and Salesforce (CRM).
Today, the company has technology partnerships with Amazon Web Services, Microsoft (MSFT), Salesforce, Oracle (ORCL) and Tableau. Its customers range from Adidas and Dairy Queen, to Johnson and Johnson (JNJ), and Unilever (UN) and Home Depot (HD).
In the digital era, maintaining market share is more difficult than ever. Digital channels make it easy for smaller firms to compete head to head with multinational companies. The businesses that are winning are using data to understand customers better.
Alteryx shares are up 90% this year and up 710% since its March 2017 IPO. Despite these numbers, the stock is cheap because the digital transformation of the enterprise world is in its infancy. Corporate managers will need bigger pipelines to push an expanding universe of data in the future. Growth-oriented investors should consider buying Alteryx into weakness.
