Market sizing is a slippery thing. Just how big is the MDM market, for example? Well, it all depends on what you include and what you exclude, which is why answers like “it is $x” are not that useful in themselves. Does the figure include software only, or also services like associated consulting? Since for any IT project services can be several times the prices of software, this matters. Moreover, within MDM have they chosen the pure-play MDM vendors only, or thrown in PIM and CDI solution providers? This is the kind of issue that the new press release for Arc Advisory Group’s estimate of MDM market size omits, rendering the quoted figure of USD 680M in 2006 somewhat meaningless on its own. Whatever the real figure is, they reckon it grew 30% in 2006 over 2005 and will essentially double by 2011. Remember that the term MDM barely existed before 2004.
As a point of reference, IDC put the MDM market at USD 5 billion in 2005, expecting it to growing at 14% annually. There is a big difference between USD 5 billion and USD 610 million, which just shows how careful you need to be when taking these analyst figures blindly. The true size will remain a complete mystery until these kinds of press releases spell out what is included and not, and what methodology was used, which at least allows informed debate.
My personal take is that the pure-play MDM software market is actually pretty small. Even throwing in CDI solutions like Siperian and DWL (now part of IBM) as well as pure-play MDM solutions like Kalido, it is hard to get a really big revenue figure if you aggregate the revenues of these vendors e.g. DWL’s revenues were less than USD 20M when bought by IBM. Throw in some sales for Oracle and SAP, but not that much, since early in 2006 Gartner reckoned Oracle had maybe 10 customers only for its CDI solution. SAP similarly has a small number of customers for its troubled MDM offering. Hence it is hard to see where even the Arc figure comes from. IDC are usually pretty thorough when it comes to their numbers, but they must have included a lot of related things to get to their figure. Even chucking in the data quality vendors still won’t get the figure that high, since even the biggest data quality vendors have revenues of about USD 50M.
My perception is that the interest level in MDM is very high but the deployed dollars in software solutions for true MDM (i.e. ignoring data quality and assorted wannabees in this field) is as yet very small, maybe of the order of USD 100M in 2006. Anyone with any insights out there feel free to chip in.