Gridsum Holding (GSUM) – M’AI’D in China
Gridsum Holding is a leading provider of sophisticated data analysis software for multinational and domestic enterprises and government agencies in China. Gridsum aggregates vast amounts of both Structured and Unstructured customer data from mobile, web and video sources in real time including 61M daily internet and mobile sessions from 233M desktop and mobile devices. This data is then processed in a centralized big data cloud computing environment and made available to customers in a format designed for efficient and real time analysis and decision making.
Gridsum’s core technology, the Gridsum Big Data Platform, with its machine learning capability, performs multi-dimensional correlation analysis and analyzes complex real-time events. With the support of its Big Data Platform, Gridsum’s customers (Nike, Tencent, JD.com, Bank of China to name a few) use its visualization and data-mining capabilities to identify complex relationships within their data and gain new insights that help them make better business decisions. The Company’s software products are designed for a variety of commercial and governmental applications. To help its enterprise customers reach China’s large and growing online and mobile population, Gridsum’s initial products have focused on digital marketing analytics and automation solutions. Gridsum is among the first companies to offer web analytics solutions based on data warehouse technology, and it is among the first digital intelligence companies in China to build solutions entirely on a distributed data warehouse architecture using the open-source Hadoop framework.
As one of the first data analytics software and functional SaaS companies in China, Stifel Nicolaus believes “Gridsum is uniquely positioned to benefit from the Chinese government’s “Made in China 2015” initiative over the next decade.” The “Made in China” is a well-publicized initiative by the Chinese government to upgrade industry in China to increase domestic content and quality in a variety of industries. With regard to technology and software, the push is to increase adoption of domestic software companies at the expense of multinational competitors. Given the sensitivity of software within businesses, Stifel believes the software category is a particular focus of the government.
Gridsum has the scale, technology, management, capital, customers and focus on innovation to address broad software challenges in China. The Made in China effort could sustain Gridsum’s revenue growth faster and longer than the current business mix suggests.
Product Overview
Marketing Automation Suite – This is Gridsum’s core product offering. Within this suite, there are different components that Gridsum offers. Some of them include:
• Web Dissector – Analyzes customer websites by monitoring clicks, page views, sessions, conversion rates, and sales.
• Mobile Dissector – This allows the company to understand mobile app user activity, gain behavioral insight, improve user experience, and retention.
• SEM Dissector – Automates search engine marketing processes and provides comprehensive reports.
• SEO Dissector – Search engine optimization tool to analyze website quality and accessibility to search engines.
• Ad Dissector – Advertisement performance monitoring and optimization product for banner, rich media and text links.
• Contribution Dissector – Tracks and analyzes user behavior over life cycle from access to conversion.
E-Government Suite – As Chinese government offices at every level of the government develop and enhance their Internet presences for consumers, Gridsum’s technology ensures efficiency and ease of use for consumers and developers. Below are some of the component products found in the E-Government Suite:
• Government Web Dissector – Gridsum’s digital intelligence solution for public sector websites, providing government website operators at local, municipal, provincial and national levels with real-time website operating data and digital intelligence.
• Government Website Group Integrated Management Platform – This is a integrated big data visualization system used by government website operators that are responsible for managing groups of websites.
New Media Suite – Serves the local, provincial and national television stations in China, all of which are owned by the related government entities. The New Media Suite technology uses software at the station and cable box level to track digital streams of content to viewers and can measure stream quality, viewer habits and other metrics to maintain digital video quality.
Information Discovery Suite – Uses search crawler technology to scour social media sources for target information such as references to a company, product reviews, news topics and more. The information Discovery Suite is the home, for now, of the Law Dissector which is a new product to serve the legal community and enable customers to search, access and analyze legal case information.
Visualization Suite – Captures the data output from Gridsum’s various Solution Suites and formats it in highly useful and effective graphs, charts, tables and other forms.
Gridsum Prophet
On the company’s Q1 earnings call, it announced that it had consolidated all of its artificial intelligence activities strategically, technically and organizationally into a new division called the Gridsum Prophet.
Gridsum Prophet aggregates technologies the company has been building since its inception in 2005 to leverage big data computing, natural language procession and machine learning. Today those capabilities continue along with image recognition, predictive industry modeling, and knowledge graph.
The company believes it is currently the technology market leader in the China enterprise-focused AI space with a global best-of-breed enterprise-AI engine and numerous AI-focused patent applications.
The company has massive amounts of marketing and other data from billions of sessions providing marketing automation and keyword bidding services for customers over the last decade. The company also has significant industry knowledge in certain verticals such as automotive, where it has served numerous global players in China, as well as personal and consumer products. As the company builds out its AI capabilities, this domain specific knowledge will be quite useful. Gridsum has significant computing power and has access to even more via its alliance with Tencent Group which has massive cloud computing capacity available to Gridsum on commercial terms, as well as speech-to-text software technology and other important resources.
Management stated that its AI products and solutions are providing quantifiable value-add to customers, and that new product features driven by Gridsum Prophet have already been “key in a double-digit number of both client wins and subscription renewals with substantial AR PU uplift.”
Many questions remain regarding the future of AI in China, but Stifel was out saying, “We know it is going to be big.” Similarly, many questions remain regarding Gridsum’s success in AI, but Stifel once again chimed in by saying, “We know that the company has the talent, customers, management, motivation and capital to build an AI business and be an early mover in the industry in China.”
