• by Ryan DeShazer , January 27, 2012

Last week Google officially announced it would be retiring its Urchin Software web analytics technology -- a move that was a long time coming.

Since Google acquired Urchin Software in 2005, it has made significant enhancements to the application’s core functionality. Focusing primarily on the JavaScript-based version of Urchin, and rebranding it “Google Analytics,” Google evolved the simple on-demand application into the world’s most widely use analytics platform. Its subsequent tag phrase, “Enterprise-class web analytics made smarter, friendlier and free” has become, for the most part, true.

The Urchin brand lived on in recent years as Google’s on-premise, log file-based analytics alternative. For some select data diehards, the pay-to- play Urchin application enabled a real-time review of web server activity. A handful of users even chose to install a dual Google Analytics – Urchin analytics stack, to reap the benefits of both JavaScript and log file analytics.

But for all the positives that Google has delivered to the analytics community, last week’s announcement was a somber moment. The Urchin brand was a major player from the heyday of web analytics. That it has shut down its services is another significant milestone in the history and evolution of the web analytics industry. Since Google introduced Google Analytics as a free, easy-to-deploy offering, every major competitor has struggled to compete. Firms have been forced to diversify, expand heavily into professional services, sell to larger organizations, or shut down altogether.

Indeed, the players from that heyday now resemble headstones in an industry graveyard:

• ClickTracks (acquired by Lyris; has since been retired)
• WebSideStory (now part of Adobe [formerly Omniture ] SiteCatalyst)
• Omniture (acquired by Adobe)
• WebTrends (still a player, but has gone through a series of missteps and re-orgs)
• Unica (acquired by IBM)
• CoreMetrics (acquired by IBM)
• Yahoo Web Analytics (limited to large advertisers and Yahoo merchants)
• Microsoft adCenter Analytics (good while it lasted – retired in 2009)

Clearly, Google has been a very disruptive force across the Web analytics industry, and I’m not entirely convinced that’s been a good thing. A single dominant player in any industry creates an atmosphere of complacency, and a space where little incentive exists to innovate. Google’s free presence in analytics creates data privacy concerns,too. What does it want with all the data it’s collecting? How is that data really being used? And as an industry, are we okay with handing over all of our data in exchange for free analysis?

Are we selling our souls to the “don’t be evil” machine?

I think it’s high time that a viable set of alternatives emerge. Most competitive platforms today cost north of $100K/year, making them inaccessible to a large number of Web marketers and webmasters. Free, open-source alternatives like Piwik are good starts but the fact that they’re deployed on-premise makes them challenging for many marketing departments to embrace.

I also am a big fan of some niche analytics technologies like Mixpanel, Clicky, and 103bees (currently down but rumored to be relaunching soon). Many of these technologies are innovating in specific areas of analytics, sidestepping a head-on battle with the Google juggernaut. But even these technologies come with their own baggage – mainly tag management (it becomes technically and practically challenging to manage multiple JavaScript analytics tags across a single website), and utility. The key benefit of “web” analytics solutions is their ability to calculate multichannel traffic referrals and website-wide engagement. Other tools zero in on specific traffic sources and/or on-site actions, limiting their broad appeal.

Google Analytics needs a legitimate challenger, one that is reasonably priced and accessible to the lay Web and search marketer. A Google Analytics alternative would push both Google and the remaining enterprise analytics players to re-trench on efforts to innovate. This challenger(s?) would only need to look to the advancements being made by the niche firms for inspiration on ways to differentiate. There’s enough substance there to disrupt this space all over again.