Andy on Enterprise Software

Kalido repositions itself

October 19, 2006

Kalido has now announced revised positioning targeted at selling solutions to business problems (and will soon announce a new major product release). The key elements are as follows. The existing enterprise data warehouse and master data management product offerings remain, but have been packaged with some new elements into solutions which are effectively different pricing/functionality mechanisms on the same core code base.

The main positioning change is the introduction of pre-built business models on top of the core technology to provide “solutions” in the areas of profitability management, specifically “customer profitability” and “product profitability”. This move is, in many ways, long overdue, as Kalido was frequently deployed in such applications but previously made no attempt to provide a pre-configured data model. Given that Kalido is very strong at version management, it is about the one data warehouse technology that can plausibly offer this without falling into the “analytic app” trap whereby a pre-built data model, once tailored, quickly becomes out of synch with new releases (as Informatica can testify after their ignominious withdrawal from this market a few years ago). In Kalido’s case its version management allows for endless tinkering with the data model while still being able to recreate previous model versions.

Kalido also announced two new packaging offerings targeted at performance management/business intelligence, one for data mart consolidation and one for a repository for corporate performance management (the latter will be particularly aimed at Cognos customers, with whom Kalido recently announced a partnership). Interestingly, these two offerings are available on a subscription basis as an alternative to traditional licensing. This is a good idea, since the industry in general is moving towards such pricing models, as evidenced by salesforce.com in particular. In these days of carefully scrutinised procurement of large software purchases, having something the customers can try and out rent rather than buy should ease sales cycles.

The recent positioning change doesn’t, however, ignore the IT audience – with solution sets geared toward “Enterprise Data Management” and “Master Data Management.” The enterprise data management category contains solutions that those familiar with Kalido will recognize as typical use cases – departmental solutions, enterprise data warehouse and networked data warehouse. The key product advance here is in scalability. Kalido was always able to handle large volumes of transaction data (one single customer instance had over a billion transactions) but there was an Achilles heel if there was a single very large master data dimension of many million of records. In B2B situations this doesn’t happen (how many products do you sell, or how many stores do you have – tens or hundreds of thousands only) but in B2C situations e.g. retail banking and Telco, it could be a problem given that you could well have 50 million customers. Kalido was comfortable up to about 10 million master data items or so in a single dimension, but struggled much beyond that, leaving a federated (now “networked”) approach as the only way forward. However in the new release some major re-engineering underneath the covers allows very large master data dimension in the 100 million range. This effectively removes the only real limitation on Kalido scalability; now you can just throw hardware at very large single instances, while Kalido’s unique ability to support a network of linked data warehouses continues to provide an effective way of deploying global data warehouses.

Technologically, Kalido’s master data management (MDM) product/solution is effectively unaffected by these announcements since it is a different code base, and a major release of this is due in January.

This new positioning targets Kalido more clearly as a business application, rather than a piece of infrastructure. This greater clarity is a result of its new CEO (Bill Hewitt), who has a strong marketing background, and should improve the market understanding of what Kalido is all about. Kalido always had differentiated technology and strong customer references (a 97% customer renewal rate testifies to that) but suffered from market positioning that switched too often and was fuzzy about the customer value proposition. This is an encouraging step in the right direction.

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