The Big Story

Free to be me

Qualtrics spun out from SAP in January, a move the experience management vendor pursued in order to strike partnerships that would have been impossible while under the shadow of the enterprise software giant. The strategy is paying off.

Over the last several months, Qualtrics has launched initiatives with ServiceNow and Genesys, vendors that compete with aspects of SAP's sprawling business. Those types of deals couldn't have happened without the IPO, executives say. (SAP still owns a majority share in Qualtrics.)

• "They don't look at us now as being a part of SAP and having the emphasis and priorities that you would have if you were a part of SAP," Qualtrics executive Brad Anderson told Protocol.
• In some ways, Qualtrics now has the best of both worlds: the ability to act independently while capitalizing on the entry point into the C-suite that SAP offers.
• "Being an independent organization gives us more flexibility in the ecosystem that we build," said Anderson. "At the same time, we have the backing and the support of one of the world's largest software organizations. So you get this massive lever with their go-to-market [strategy] and presence."

Qualtrics operates in a space that seems almost too philosophical to actually be operationally relevant.

• It gathers information from sources like customer service calls, Amazon reviews, Twitter comments, surveys and more, then does a sentiment analysis on the data to give executives a deeper view into how their company is perceived among end users, among other insights.
• "That brand gets embodied in the product and services it builds," said Anderson. "What leaders really want to understand is what is happening in the hearts and minds of our customers, what are the actual feelings they have and the sentiment and emotion as they are using the product."

But as eye-rolling as it may be to talk about brands having traits like a personality or backstory, the company swears that's what consumers think about when making purchases. And that's why businesses need to care.

• By analyzing conversations between customers and service agents, for example, Qualtrics can pinpoint which employees require more hand-holding in order to deliver a better experience.
• In a world where the call center is becoming not only the key touchpoint with consumers, but also the central nervous system for efforts to build more robust user profiles, that kind of insight is immensely valuable.
• "It's a gold mine to understand what product gaps need to be filled," said Anderson. "But you also have a chance through these call center solutions to be able to help train and improve every single individual."
• But it's not just the consumer world where these insights are valuable. The software Qualtrics most commonly connects to is Salesforce. The combination of data from the two sources can give account teams fast insight into the customers who may be at risk of ending their contract.

And if Qualtrics's performance over the past year is any indication, enterprises are quickly realizing the power of customer experience data. Or, at the very least, needing to now find ways to quickly plug up information gaps in their customer profiles.

• Qualtrics says it has collected over 4 billion user profiles, a number that grew 135% over the last year, making it "the world's largest collection of human sentiment data."
• It's on pace to conduct 1.5 billion analyses in 2021. In May alone, there were over 200 million workflows executed on the Qualtrics platform.
• The growth is a reflection of the pivot toward first-party data, a trend accelerated by global efforts to establish consumer privacy laws and Apple's decision to give users more visibility into cross-application tracking that many advertisers rely on.
• "Our value in a world where you have third-party cookies going away and the laws around privacy [increasing], it actually accelerates our business," said Anderson.

But it's not just the consumer world; the company also has a big footprint internally within organizations. Companies are tapping Qualtrics to learn what their own employees think about the company and using that information to craft new policies and create better workplaces.

• In a real-world example that's playing out right now, business leaders are pinging their workers about what the evolving hybrid environment should look like, per Anderson.
• There's also now an effort to combine the disparate systems that organizational heads are using to glean those insights.
• In the past, "multiple business units [were] conducting experience management in their own silo for years," he said. It's now "the CIO being tasked with finding a solution that can meet the needs of all the businesses but is built on one common platform."

The infusion of all this data is critical to help train Qualtrics's machine-learning models that detect human sentiment, a very difficult task that few have mastered.

• The advantage of that can't be overstated. And given the huge surge of interest among enterprises to build customer data platforms, it's tech like that which will serve as a key differentiating factor between vendors.
• Still, the data industry is an increasingly crowded and complicated space. And while Qualtrics may now be free to pursue more partnerships, it still has to prove that it can thrive without the cover of SAP. (Its stock is down 21% from a post-IPO high in January.)

— Joe Williams

A MESSAGE FROM QUALCOMM

We compare 5G to electricity. In the beginning, people might not have known what electricity was good for. Now it's an essential part of life. You always assume it's going to be there. That's how we think about 5G and its role in connecting everything to the cloud. It will transform how we communicate.

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Never start a company with co-founders who you haven't already learned to deeply respect through both success and failure. A useful corollary is to consider first spending time at a dynamic, high-growth company before launching your own venture. Nothing is so valuable as learning how processes and people can align and work together to make a company successful. In my experience there is really no end to the variety in failure modes, and conversely, incredible similarities in successful modalities.

What's your advice to younger technologists who want to build a career in this field?

I'm often asked whether a career at Google, Amazon or Facebook makes sense as a new college graduate. Of course the big technology giants are great places to work: They pay well, the benefits are excellent and the headline products (at least) are by definition world-changing. However, the problem is that you will be just one of tens of thousands of software developers. By contrast, there is always an exciting group of companies that have gone beyond the startup risk profile and show significant momentum. These smaller, fast-moving companies provide an opportunity to board a rocket ship — in career advancement, financial success and reputation

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As a developer, I'm most excited to see the rapid evolution and adoption of public cloud and infrastructure as a service. These are paving the way for increasingly powerful abstractions above deployment realities, freeing developers to focus exclusively on faster iteration of applications and services. Keep a close eye on serverless and multi-region trends as well as on low-code and no-code platforms. These point clearly to a future where ideas can be built locally and then deployed as sophisticated global offerings in a fraction of the time traditionally required.

What's one piece of reading that you think should be a requirement for those in the industry?

The most useful book recommendation in my experience is "Good Strategy/Bad Strategy: The Difference and Why It Matters" by Richard Rumelt. Strategy is undoubtedly the most important concept in competitive contests, and also the least well understood. This book was extraordinarily helpful in clearing up my own misconceptions, which can pave the way for implementing strategies that are coherent and more likely to be successful.

Around the Enterprise

• Jim Whitehurst's departure means there's a whole future IBM we'll never know, and it's a big loss for Big Blue.
• Microsoft reportedly acquired RiskIQ, a cloud-oriented cybersecurity company, for $500 million.
• Microsoft also shelled out $13.6 million to bug bounty hunters over the last 12 months, an amount it was probably glad to pay given its recent cybersecurity issues.
• And in even more Microsoft news, the company gave out a $1,500 bonus to most non-executive employees. (Reminder: Microsoft is worth $2 trillion.)
• New York City launched a first-of-its-kind Cyberattack Defense Center. The effort, which involves partners from the public and private sector, was previously all virtual, per the WSJ.

A MESSAGE FROM QUALCOMM

We compare 5G to electricity. In the beginning, people might not have known what electricity was good for. Now it's an essential part of life. You always assume it's going to be there. That's how we think about 5G and its role in connecting everything to the cloud. It will transform how we communicate.

Learn more