Global CIO: Will Informatica's Surging Success Trigger A Takeover?Global CIO: Will Informatica's Surging Success Trigger A Takeover?
Strong and profitable growth, great technology, a red-hot market, and $500M in revenue: what's not to like?
Full spectrum of MDM offerings: Informatica’s Data Integration and Data Quality products combine with Siperian’s for a comprehensive master data platform. Siperian brings some of the best data acquisition, data cleansing, relationship and hierarchy management, event management, reference data management, data stewardship, and architecture to market. Usability and rich graphical interface are other strong points. In addition, the Identity Systems match engine and AddressDoctor postal validation already serve as best of breed solutions in many data quality initiatives.
Point of View (POV): Informatica has been slowly tip-toeing in this market with 6 acquisitions in 4 years for almost $400M. Consequently, the Redwood City, CA vendor has assembled the key components for a comprehensive MDM offering (see Figure 1). Informatica can now offer a wide range of entry points from smaller data quality projects to larger identity management projects enabled by a series of data integration flows. Siperian is the crown jewel that takes Informatica directly into the MDM market and puts competitors such as Oracle, IBM, Initiate Systems, and SAP on guard.
Over at Forrester, analyst Rob Karel offered this take on what the deal would mean to competitors—and the upshot is, they're not happy:
On the competitive front, Oracle’s Siebel Universal Customer Master (UCM) and D&B Purisma MDM products currently OEM Identity Systems matching technology as the core to their MDM engines. On the postal address data quality front, MDM competitors DataFlux, IBM, and Initiate Systems either OEM or resell Informatica’s AddressDoctor technology. And in addition, Oracle also partners with Informatica to provide its Informatica Data Quality software as an option for its MDM clients. Oracle may likely be the most significantly impacted, so what does this mean for them? In the short term, I’m sure Informatica will be more than happy to continue to collect revenue from Oracle while keeping this partnership alive, but don’t expect future negotiated contracted terms to remain very reasonable as Informatica gains traction with its MDM strategy. No matter how often Oracle says how happy they are to maintain a friendly state of co-opetition with strategic partners, I don’t anticipate they will want to run the risk of a competitor pulling the rug out from under its aggressive MDM strategy.
Just like in Rudyard Kipling's "The Jungle Book," all the wolves ignored Mowgli when he was little and sweet and unthreatening and didn't have much power. But as he grew in size and strength and awareness and capability, well, the big dogs just decided they'd rather not have such an independent and unaligned force disrupting the status quo and undercutting their power base.
Abbasi is a huge fan—and partner—of Salesforce.com, a company that in the past few years itself had to traverse that unsettled ground from frisky newcomer to entrenched and full-sized competitor. While not nearly the size of Salesforce.com, Informatica's still similar in many ways: it's got a new set of ideas, a new approach to the market, considerable sales momentum, and enough mass to be dangerous to competitors but perhaps not enough to preserve its independence indefinitely.
But Sohaib Abbasi is not your typical CEO—he's built a track record of seeing important new things well before others do, as was the case with his early decision to ensure Informatica could help customers tie together the disparate worlds of on-premise data and applications and storage with those in the cloud.
"Our customers first started experimenting with SaaS, and now more recently with a variety of cloud applications, like Salesforce.com," he said in our conversation last week. "And now they're moving up to cloud-based infrastructure like Amazon EC2 and cloud platforms like Force.com, just as they did with building their on-premise model up and out.
"As customers are looking at Infrastructure as a Service and Platform as a Service, a common concern is security: securing the resources and securing the data—and how to retain control over all those resources, particularly data you've outsourced into the cloud.
"We recognized this five years ago and saw the need to help them manage and secure all those widespread resources and data, and the roadmap we've delivered on over those needs."
Indeed they have, much to his and Informatica's credit. And it will be interesting to see if Abbasi can foresee a way for Informatica to remain independent among some big, hungry partner/competitors who want what Informatica's got.
RECOMMENDED READING: Global CIO: Informatica Joins Ranks Of Elite Enterprise Software Companies Global CIO: Oracle CEO Larry Ellison On The Future Of IT Global CIO: SAP Tells Oracle To Free Java But Keeps Own Software Closed Global CIO: The Top 10 CIO Issues For 2010 Bob Evans is senior VP and director of information's Global CIO unit.
To find out more about Bob Evans, please visit his page.
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