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Uncovering actionable insights from data are critical to modern business success but have become increasingly challenging as data volume, velocity, and variety continue to expand. Traditional data analysis tools and processes can be slow, complex, challenging to use, and resource-intensive, often requiring multiple steps by data analysts, data scientists, data engineers, information technology, employees, and other data workers to complete even the most basic analysis.
As the volume and diversity of data have expanded and evolved at an unprecedented pace, IT organizations are struggling to provide the businesses they serve with the tools necessary for data analysis. This has resulted in data workers, particularly non-technical users, seeking intuitive, self-service software solutions to bypass IT and perform data analytics themselves.
As a result, these point tools and processes are often unable to keep pace with the sophistication and speed of analytics demanded by organizations today. Traditional data tools do not offer the sophistication, scalability, and ease of use that business analysts need to transform massive amounts of available data into intelligent, actionable insights.
Alteryx’s software platform enables organizations to dramatically improve business outcomes and the productivity of their business analysts. In this strategy story, we analyzed the business model of Alteryx and understood what does Alteryx do and how does it work?
What does Alteryx do? How does Alteryx work?
Alteryx, founded in 1997, is an American computer software company. Alteryx has a subscription-based business model and had 8,358 customers as of Dec’22. The company’s products are used for data science and analytics. The software is designed to make advanced analytics accessible to any data worker.
Alteryx is a leader in analytics automation. The Alteryx Analytics Automation Platform empowers “analytics for all” by delivering easy, end-to-end automation of data engineering, analytics, reporting, machine learning, and data science processes, enabling enterprises to democratize data analytics across their organizations for a broad range of use cases.
With the Alteryx Analytics Automation Platform, users can automate the full range of analytics and data science processes, embed intelligent decision-making and actions, and empower their organization to enable top and bottom-line impact, efficiency gains, and rapid upskilling.
Alteryx’s platform democratizes access to data-driven insights by making sophisticated analytics capabilities available to all users, ranging from IT administrators and business analysts to data engineers and trained data scientists. The availability of Alteryx solutions in the cloud means users can gain access to insights even faster.
Alteryx unifies the analytics and analytic process into one simple self-service platform by combining previously distributed tasks among multiple tools and parties. Alteryx’s platform allows a single user or group of users to easily and quickly discover, access, and prepare data from various sources, perform a variety of analyses, and deliver analytical output to drive data-driven decisions and improve business outcomes.
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This is done through a no-code, low-code approach, visual workflows, and an intuitive drag-and-drop interface that can reduce tedious, time-consuming manual tasks to a few mouse clicks while eliminating the need to write complex software code.
Alteryx’s Alteryx Analytics Cloud platform delivers an enterprise-grade platform, deploying Alteryx’s cloud-based products with the scalability, built-in governance, and security that organizations demand as a part of their digital transformation.
What is the business model of Alteryx?
Efficient: Alteryx offers a self-service platform that allows business analysts to perform analysis on their own that traditionally required multiple parties and work streams to complete.
Independent: Alteryx’s platform offers analytics with easily understandable drag-and-drop tools that have easy-to-configure parameters that do not require coding. With Alteryx’s platform, business analysts can manage all steps in an analytic process without the assistance of their IT departments.
Flexible: Alteryx allows users to create a visual workflow to securely interact with the underlying source data. Business analysts can build apps that let others interact with the workflow through a simple interface available on the public or private cloud. They can configure a workflow to output results directly to a database or system of record.
Scalable: Alteryx’s platform offers flexibility to scale as each customer’s business needs grow. By pushing analytical workloads to reliable server architecture, customers can run sophisticated compute-intensive processes more efficiently than local machines allow while automating and scheduling these workflows to give business analysts stronger control of their analytic landscape.
Products & Services
Alteryx’s Analytics Automation Platform democratizes and automates tasks for workers across the analytics value chain. With subscription and consumption-based options, Alteryx’s platform allows organizations to discover, access, prepare, and analyze data from various sources and benefit from data-driven decisions, including the consumption of results and insights discovered through real-time model deployment.
Alteryx’s platform architecture allows the deployment of analytics solutions on hyper scalers, including Amazon Web Services, or AWS, Microsoft Azure, and Google Cloud Platform, or GCP, and is enabling Alteryx’s customers to upskill millions of underserved data workers to drive better business results.
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Alteryx’s native data connection capabilities can unlock the data housed in customer cloud data warehouses, cloud data lakes, and on-premise databases. Alteryx’s platform supports native integrations with major cloud vendors, including Snowflake, AWS Redshift, Databricks, Google BigQuery, and Azure Synapse, and Alteryx’s Open Database Connectivity/Java Database Connectivity architecture allows customers to bring their data provider.
Alteryx’s platform also supports native tools to access data through application programming interface endpoints directly or by leveraging Alteryx’s Python software development kit to build connectors to meet unique needs.
Alteryx’s analytics platform comprises:
- Alteryx Designer: Alteryx’s data profiling, preparation, blending, and analytics product creates visual workflows or analytic processes through an intuitive drag-and-drop interface.
- Alteryx Server: Alteryx’s secure and scalable server-based product for scheduling, sharing, and running analytic processes and applications in a web-based environment.
- Alteryx Connect: Alteryx’s collaborative data exploration platform for discovering information assets and sharing recommendations across the enterprise.
- Alteryx Intelligence Suite: Alteryx’s solution for artificial intelligence provides automated modeling, optical character recognition, and natural language processing to gain insights and produce production models.
- Alteryx Analytics Cloud. This platform includes:
- Alteryx Designer Cloud: Alteryx’s cloud-native data profiling, preparation, and data pipelining product is used to create visual workflows or analytic processes through Alteryx’s drag-and-drop interface.
- Alteryx Machine Learning: Alteryx’s cloud-based solution for automated machine learning, or AutoML, where business analysts can quickly build, validate, iterate, and explore machine learning models with a fully guided user experience.
- Alteryx Auto Insights: Alteryx’s cloud-native analytics solution is built for enterprises that utilize artificial intelligence-driven data discovery to perform root cause analysis of business trends to automate insights for business users.
Alteryx made $855 Million in 2022. Alteryx has a subscription-based business model. Alteryx generates revenue from licensing subscription-based software, data subscription services, and professional services, including training and consulting services.
Revenue from subscriptions reflects the revenue recognized from sales of licenses to Alteryx’s platform. Subscription fees are based primarily on the number of users of Alteryx’s platform. The subscription-based license generally includes access to hosted services and software and post-contract support (PCS). Alteryx also generates revenue from selling subscriptions to third-party syndicated data.
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Alteryx generates revenue from professional services fees for consulting engagements related to training customers, channel partners, and consulting services. Revenue from professional services represented less than 5% of revenue in 2022.
In addition, due to Alteryx’s focus on expanding the use of Alteryx’s platform with existing customers, a large portion of Alteryx’s revenue in any given period is attributable to Alteryx’s existing customers compared to new customers.