The number of products that record, massage and present usage data from Web sites has exploded in the past few months. As of November, 57 companies were offering log analysis software, up from a mere 12 in July, according to Bill Hopkins, research director at the Partner Group in Stamford, Conn. Hopkins attributes this growth to the obvious market need to gather data about how users are consuming Web-based information. That need is driven both by the requirements of advertising, sales and the need for real-time analysis of usage.

Though there aren't many companies using log analysis software now, almost every inquiry that I get from companies now has to do with measuring site traffic in some way, shape or form," Hopkins said.

Indeed, the number of companies offering products seems so far ahead of the pool of sites actually deploying analysis tools that it is unclear if there is enough demand to warrant the current wave of new players. A recent survey of 50 professional sites by Forrester Research showed that only 11 percent were using any type of log analysis software.

"Our prediction is that by 1998 there will have emerged two to four vendors who will set the standard for site analysis," Hopkins said. "It's going to be a bloodbath."

If their rules of the past 18 months of Web history hold true in the future, this much growth in a single service area is sure to attract the attention of larger solution providers, which would radically change the analysis software business.

"The whole thing will become a moot point if Microsoft of Netscape decided to embed site analysis software in their servers, which is a distinct possibility," Hopkins said.

Site analysis packages, which once simply created enhanced views of standard server log information, have grown along with the ever-expanding job of the Web master. The latest market entrants seek to get around the fundamental problem with usage analysis in a stateless system. While server logs are limited to what address a user came from and where he of she went next, the latest tools are able to create state-a persistent record of session--and can track each users path as he navigates across a site.

This provides the information that Web masters need to improve the quality of the site, and to provide data that helps advertisers measure how effective a site is in reaching its target audience. "Site analysis tools measure a plethora of technical goodies," said Hopkins.

With so many companies going after the same market, differentiation of the products is the hallmark of an emerging next generation of software products. "These new software products aren't just log analysis tools--they're site analysis or site tracking devices," said Ted Julian, Internet research manager at International Data Corp. "Not only do they provide IP addresses, but they also track which pages the users go to, how much time they spend there, whether whether they received a page a page when they downloaded it. They allow you to track users over multiple visits and massage the information into a fashion that is useful for both marketing people and technicians."

Beyond Hit Counters

Most of the currents players that market log analysis software, such as EG software Inc., Interse Corp., I/Pro Corp., net.Genesis Corp., Open Market Inc., and Marketwave are positioning themselves to cater to this demand for site analysis tools, as opposed to mere hit counters.

"Ease of use and providing greater levels of information are the way these vendors are trying to differentiate themselves," Julian said. "Most Web sites require analysis tools that can run their own reports through multiple programs. It doesn't matter if you have architeched all kinds of ways of getting information. If it is not simple enough to be used by marketing personnel, it just won't work."

Several new companies, such as Net Perceptions Inc., Andromedia, Inc., and accrue Software, are hoping to fill the gap that currently exists in measuring the activity of a server. Besides offering site traffic reports, these companies also offer personalization, real-time report generation, and incorporated databases. But even these innovations are only a first step toward providing the services that Web masters are demanding.

"In the future, analysis software is going to be an integral part of the development and delivery of a Web site," said Josh Bernoff, a senior analysis at Forrester. "None of the current players in the market do that."

Accrue's approach is "to site on the server and watch the files go back and forth," according to Bernoff. It's product, called Accrue Insight, Analyses how much time a user spends on a particular age, the number of sessions and links activated, how they navigate through the site, keywords most often searched, and downloads. the product is a Java server module that enable usage information to be extracted and analyzed in real time, making it possible to do some rudimentary performance tuning and load balancing as well.

ARIA, from Andromedia, is an object-oriented system that uses six discrete modules to record and report a Web site's usage. Net Perceptions product, GroupLens, is a server-based toolkit that includes a well-documented API with a database design. It aims to "predict" a user's actions and preferences through a "library of tunable algorithms."

"What distinguishes these products is that they provide personalized site analysis," said John Robb, a senior analyst in the interactive technology strategies group at Forrester. "Not only do they provides file-based tracking, but also allow for databases to be incorporated. And some do this in real time."