Informatica Update

At Informatica World in Las Vegas recently the company made a number of announcements. The label “Intelligent Data Platform” was used to encompass the existing technology plus some new elements around metadata. The key new element was software that helped end-users to provision data directly in an attempt to unblock the traditional bottleneck when IT and business users. The software allows a business user to search for available data using business terms, and then presents to the users the best matches for that, including showing the source systems. The system presents an interface to the user and can capture the actions the user takes in selecting data in the form of workflow steps, that can later be automated by IT if appropriate. This certainly demonstrated well, and seems to have had some happy early adopters.

Separately, Informatica announced a data security product. Secure@Source that will be an early application of the Intelligence Data Platform. A demo included an attractive looking “heat map” showing data sensitivity, proliferation and levels of risk, was based on prior DI mappings between sources and targets defined in PowerCenter. . The obvious issue here is whether Informatica’s sales force understands the specialised security market, and whether customers will perceive it is a natural brand in an area that it not currently perceived to be associated with by many, although to be fair it already has offerings in PDM, DDM and test management.

There was plenty of discussion around Big Data at the conference, and partners such as Cloudera spoke on the subject as well as staff from the company. Certainly the scale of data now can be vast, with Facebook apparently having 500 petabytes to manage. The company has several initiatives in this area linking to Hadoop. Certainly all that data will have to be managed somehow, so companies with core strengths in integration and data quality ought in principle to be able to carve out a place in the Big Data world, which at present still seems very formative and immature in general. The Vibe Data Stream product is clearly aimed at this new type of data, such as that generated by sensors.

Financially, Informatica seems back on track after the issues of 2012, and seems to have had a good quarter. One intriguing thing is just how significant MDM is now to Informatica – a whole day at the conference was devoted to MDM, and although the company does not break out software sales by product line, it was clear that MDM is both the fastest growing segment for it, and now is a significant chunk of its new license revenues. The $130 million acquisition of Siperian may in retrospect seem to be money well spent. Version 10 is the next major release, due out in late 2014.

The company is clearly investing heavily at present, with 17% of its spend going into R&D at the moment. As the company seeks to maintain growth against a backdrop where the core integration market is maturing, the main challenge for the company would seem to me to be whether its sales staff, used to selling integration software to IT folks, can adapt to selling the new products effectively, some of whom are aimed at business people.

Kalido changes hands

Yesterday Kalido, the data warehouse and MDM company, changed owners. Rather than an acquisition by a software company, the buyer was an investment company called Silverback, a Texas company backed by a VC called Austin Ventures. The company specialises in purchasing software companies in related groups, building the businesses into something greater than the original parts. It has recently done this with a series of project management-related acquisitions in the form of Upland Software. In this context, presumably Kalido will be combined with Noetix, an analytics company in their portfolio, perhaps with something else to follow. At first glance, the synergy here looks limited, but we shall see. It would make sense if acquisitions in the areas of data quality and perhaps data integration followed, allowing a broader platform-based message around master data.

As someone with a personal interest in the company (I founded it, but left in 2006 when it moved its management to the USA) it is a little sad to see Kalido not achieve greater things than it has in the market, at least up until now. It was perhaps a bit ahead of its time, and had technology features back in 1996 that are only now appearing in (some) current competitors: time variance and the management of federations of hub instances being key examples. The marketing messaging and sales execution never matched the technology, though the company has nevertheless built up an impressive portfolio of global customers, which remain a considerable asset. Hopefully the new backers will invigorate the company, though to do this a key indicator will be whether they manage to lock in and motivate key technical staff. If this happens, and genuinely synergistic acquisitions follow, then perhaps the company’s technology will gain the wider audience that it deserves.

MDM Software Evaluation

The Information Difference recently launched a new offering called MDM Select. This builds on our existing detailed functional model of an ideal MDM product, and goes further by scoring all the leading MDM products in the market against it. An end user purchasing MDM select merely has to weight the various functions according to priority to them, which will vary by use case, and then press a button. The weighted scores of the leading MDM products will then be sent to them, removing the need for a lengthy evaluation process. At the very least this is a quick way to identify a shortlist suited to your needs. I will soon be talking about this at a webinar on Thursday September12th at 08:00 PST = 11:00 EST = 16:00 GMT = 17:00 European time.

To register and for more details see this link.

Informatica’s MDM strategy

I recently spent a couple of days with the management of Informatica at the Rosewood Hotel in Palo Alto. The company sees a lot of potential in the notionally rather mature area of data integration, with hand-coding still the norm in many companies, especially in less developed markets such as China, Russia and Mexico. From an MDM viewpoint, In 2012 one third of the revenue was part of a broader deal, with the company claiming a doubling of customer logos. Informatica’s MDM offering is based on two acquisitions, Siperian and now Helier. Siperian was also noted for its good scalability for customer data, and a recent customer win at HP illustrates that, the application dealing with 1.5 billion customer records, and handling 37,000 users.

The Heiler acquisition is still technically not complete (German securities rules in such things moves slowly) but it was evident that the Heiler staff were already working in concert with Informatica. Heiler itself grew 29% in 2012, showing a growth spurt in Q4 after the acquisition was announced. Informatica had for some time claimed that their MDM offering was multi-domain, but in reality most customer examples were based on customer data, and heavily skewed towards North America. The purchase of European PIM vendor Heiler gives more balance to this picture, and in time one would expect to see the separate MDM hubs sharing metadata etc. Informatica actually has a quite good story around managing multiple MDM hubs, but this is one that it has been quiet about, perhaps not perceiving much demand, yet its capabilities e.g. in data masking, are useful in such contexts and should enable it to do a better job than many in a federated environment. For mufti-national companies managing a federation of MDM hubs will be the reality, but the MDM market has been in denial about this. To me there is an opportunity here for any vendor that can clearly articulate a federated vision.

Informatica has clearly embraced MDM as a core technology, and indeed this make sense given the higher growth rates in the MDM market than in its traditional integration market.

Informatica goes shopping

Informatica buys Heiler

Informatica has made an offer to buy Germany PIM vendor Heiler – the deal has not gone through yet and the German securities laws are complex, but it appears to be a “friendly” takeover. There are a few interesting aspects to this. Firstly, it sets a useful valuation benchmark. Heiler did 17.4 million Euros in revenue in their last financial year, and the offer is 80.8 million, so this is a price to sales ratio of 4.6, a healthy though not extreme valuation (Heiler also has 15.8 million euros of cash and is modestly profitable, with profits in the last financial year of 1.4 million Euros). It had been around in the MDM market for 12 years, and so is quite a mature product/company, shown in the split of its revenue, with nearly half its revenue in services, and a fifth in maintenance revenue, with several hundred customers.

The deal makes sense to Heiler, as Informatica has a far more powerful sales channel. From Informatica’s perspective they gain a solid piece of technology with a proven footprint in the product data domain, whereas Informatica, for all its multi-domain marketing, has been primarily used to managed customer data. They also gain a slice of the European MDM market, reducing their heavy US revenue preponderance. Moreover, assuming the deal goes ahead, Informatica now has several hundred new customers to up-sell its other software to e.g. its integration and data quality offerings.

The deal also shows that the M&A market is still active for MDM software, which is positive news for the shareholders of other independent MDM vendors out there.

Upcoming webinar – Choosing an MDM Vendor

Choosing an MDM vendor is (or should be) a big decision. It is not just the price of the software – you will, according to Information Difference research, spend four times as much on services as on software when you implement an MDM solution, and then you have to consider maintenance over many years. Yet in my experience some companies do not allow much time to choose their vendor. They perhaps go with an incumbent platform vendor, or ask a systems integrator, or maybe do a brief beauty parade of a few vendors. In a free upcoming webinar I talk about best practice in this area:

It is on September 19th – register now.

The Long and Winding Road of MDM Product Integration

IBM as just announced version 10 of its MDM offering, now called “Infosphere Master Data Management”. IBM has been on a long-term path to merging the MDM technologies it acquired in the product domain (from Trigo) and the customer domain (DWL). This was a path further complicated by its more recent purchase of Initiate. This announcement brings these product lines together, at least under a common marketing banner and price structure. The idea is that the new product is available is four “editions”. The “collaborative” edition is essentially the old MDM Server for PIM (exTrigo). The “standard” edition is essentially the old Initiate product. The “Advanced” edition bundles these two technologies together. The “enterprise edition” adds in the old MDM Server for Customer (ex DWL) product.

There is a unified pricing model behind these editions, though this apparent step forward is rather handicapped by the pricing model being distinctly opaque. It is based on no less than four parameters: edition, industry, data domains being managed and how many records are being mastered. When something becomes this complex it gives the sales force considerable flexibility (presumably the intention) but is potentially confusing for the customers, and possibly IBM’s own staff.

Fortunately, as well as this partial step forward on the marketing side, there is some actual code in the release. The Initiate matching engine, which was well regarded, is now used across the product line for probabilistic matching (the old Quality Stage approach is still available fro deterministic matching). The workflow engine BPM Express is bundled in with the enterprise edition, meaning that very complex sets of workflow and permissions can now be handled, if need be in a real-time manner. There is a much-needed overhaul of the old PIM user interlace in the new Collaborative Edition. Other enhancements are present, such as integration with the Guardium Data Activity Monitor.

All this amounts to a significant release that at least starts IBM on a path to unifying its MDM technologies. This will be a long path, as there are still three underlying, different, server technologies here. However at least customers now have a sense of the MDM direction in which IBM is heading now even if they need to realise that it will be a long and winding road before they get there.

MDM in Asia

Much of the English-speaking press tends to highlight master data management projects and activities in the USA and Europe, but this is only part of the picture. Asia Pacific includes the world’s most dynamic and largest economies, including China and India, as well as some of its most technologically advanced, such as Singapore. Casting the map a little further, Australia is the only “developed” economy that has sailed through the economic turbulence of the last three years relatively untroubled. Clearly, improving the state of master data will be as relevant to companies and governments in these economies as it is to western ones.

I will be participating in a series of MDM-related talks in this region in August, starting in Mumbai, then moving on to Singapore, Hong Kong and Beijing, then Melbourne and Australia. The topic is “customer centricity” and how MDM can help build up a better view of the customer. This is a major headache for most enterprises, who usually have multiple competing systems holding customer data (an average of six systems according to an Information Difference survey, with some companies having over 100 systems holding customer data). On a project in Australia that I was involved with some years ago one company thought that it had 25,000 customers. After a project to rationalise and combine the various systems holding customer data the true figure turned out to be just 5,000 – a huge difference.

Understanding customer profitability is important. In one project at a US manufacturer I was involved with, a careful review of the cost allocation process revealed that a significant proportion of contracts with customers were in fact loss-making to the corporation. What was worse was that many of these were larger contracts, where customers had demanded, and received, large discounts due to their scale. Following this review a number of contracts were re-negotiated, paying for the cost of the master data project within months.

It can be seen that getting control of your customer data is important and can yield significant monetary benefits.

The forum focuses on improving customer data. It is hosted by Informatica and sponsored by Capgemini. The detailed schedule and how to register can be found here:

If you are in the region and are free on one of these dates, then I hope to see you there.

MDM Cultural Differences

It is clear to anyone that has worked in a global organization that there are distinct differences in the approach to technology in different countries. Of course generalizations are dangerous, but usually US companies are early adopters and happy to take risks on relatively unproven technology if it delivers real benefit. The UK and Scandinavia usually follow the US (except in mobile technology, where the US tends to be a laggard). After that, other European companies adopt at varying pace: the Dutch are usually fairly early adopters, the French less so, while the Germans and the Swiss like to see everything proven before taking a chance on something new. Asia is a complex set of individual markets, with some areas that are leading e.g. South Korea in broadband, while in other cases they may lag Europe in the adoption curve. On a recent visit to Japan I saw both ends of the spectrum, with very advanced GPS and mapping systems yet some fairly archaic back-office technology.

I am curious as to whether MDM will merely follow the contours of this conventional technology adoption pattern, or whether it will be different, which it may be since a key difference is that MDM requires more significant business engagement than many technologies. For example I was speaking at a conference in Sweden last week and was a little surprised at how new MDM appeared to be in a country that is generally an early adopter of technology. I am curious as to whether MDM practitioners have noticed any cultural differences in the way that MDM is being tackled? If so please post a comment of your views on this blog.

Psst, got an MDM consultant?

MDM appears to be getting trendy at the moment judging by the number of calls I have had in the last few weeks from headhunters (sorry: executive search consultants) wanting to recruit people with serious MDM experience, both for systems integrators and end-users companies. Of course, knowing what MDM actually stands for would be an advantage if this is your task, so I’d encourage such worthy people to get some education on the subject first before contacting me to plunder my contact network. This on-line course:

will do the job, and of course there are alternatives. I was most amused by the conversation with one recruitment person, who has been asked by a big systems integrator to urgently recruit experienced MDM consultants in order to populate a project that they have apparently already sold to an unsuspecting client. I am guessing their pitch to the client was not “We have no idea what this MDM thing is, let alone any experience in it, but if you give us a load of money we’ll definitely try and hire someone who does”. Or in this case hire someone else who doesn’t know what it means to find someone who might do and may know someone who does.

Don’t you just love the world of consultancy?