Andy on Enterprise Software

Leaving Las Vegas

May 16, 2015

The Informatica World 2015 event in Las Vegas was held as the company was in the process of being taken off the stock market and into private ownership by private equity firm Permira and a Canadian pension fund. The company was still in its quiet period so was unable to offer any real detail about this. However my perception is that one key reason for the change may be that the company executives can see that there is a growing industry momentum towards cloud computing. This is a challenge to all major vendors with large installed bases, because the subscription pricing model associated with the cloud presents a considerable challenge as to how vendors will actually make money compared to their current on-premise business model. A quick look at the finances of publicly held cloud-only companies suggest that even these specialists have yet to really figure it out, with a sea of red ink in the accounts of most. If Informatica is to embrace this change then it is likely that it’s profitability will suffer, and private investors may offer a more patient perspective than Wall Street, which is notoriously focused on short-term earnings. It would seem to me that there is unlikely to be any real change of emphasis around MDM from Informatica, given that it seems to be their fastest growing business line.

On the specifics of the conference, there were announcements for the company around its major products, including its recent foray into data security. The most intriguing was the prospect of a yet to be delivered product called “live data map”. The idea is to allow semantic discovery within corporate data, and allow end-users to vote on how reliable particular corporate data elements are, rather as consumers vote for movies on IMDB or rate others on eBay. The idea is that this approach may be particularly useful as companies have to deal with “data lakes” where data will have little or none of the validation applied to it that would (in theory) be the case with current corporate systems. The idea is tantalising but this was a statement of direction rather than a product that was ready for market.

The thing that I found most useful was the array of customer presentations, over a hundred in all. BP gave an interesting talk about data quality in the upstream oil industry, which has typically not been a big focus for data quality vendors (there is no name and address validation in the upstream). Data governance was a common theme in several presentations, clearly key to the success of both master data and data quality projects. There was a particularly impressive presentation by GE Aviation about their master data project, which had to deal with very complex aeroplane engine data.

Overall, Informatica’s going private should not have any negative impact on customers, at least unless its executives end up taking their eye off the ball due to the inevitable distractions associated with new ownership.