Revolution Analytics wants to overthrow old statistical tools

If you’re an expert looking to predict what the stock market will do based on what it’s done in the past, or what a pharmaceutical drug candidate will do based on what you know about the human body, chances are you already know about open source R programming language.

It’s become the standard statistical language in universities, and it has the potential to see wide use among scientists at biotech firms and analysts at hedge funds. But the wider business community isn’t using R yet, instead relying on analytical technologies designed more than 30 years ago.

Palo Alto-based Revolution Analytics is looking to change that.

Compared to older technologies, Revolution Analytics CEO Norman Nie said, the open source R programming language is much more flexible, and it enables users to do any statistical modeling operation on any conceivable data set.

To that end the company is marketing an analytics product aimed at business customers, called Revolution R, which it hopes will do for R what Red Hat did for Linux — making a powerful tool known to experts into something that can be used by everyone.

Revolution’s move into business analytics puts it head-to-head with some of the world’s largest software companies. IBM Corp., with its $95 billion in revenue last year, is a player, and the other big company in the space, SAS Institute Inc., had $2.3 billion in revenue in 2009. Revolution, by contrast, has $16 million in venture funding from Intel Capital and Northbridge Venture Partners, and a more modest sales projection of between $8 million and $11 million this year, Nie said.

New language is competitive

It would take a lot for a David-like Revolution to overcome two Goliaths, but Nie said R gives his company a key competitive advantage.

Jon Xavier can be reached at 408.299.1826 or jxavier@bizjournals.com.