In-Depth

ETL: Vendors Pay Attention to the Mid-Sized Enterprise

The ETL mid-market is in play, and Ascential, Informatica, and other vendors are taking notice

• By Stephen Swoyer
• 09/22/2004

The high-end of the ETL market is dominated largely by Ascential Software Corp., Informatica Corp., and SAS Institute Inc., companies that are often cited as the market share leaders in the ETL space as a whole.

At least one analyst—Forrester Research’s Phil Russom—thinks these three vendors, along with midrange competitors such as Ab Initio Software, Business Objects SA, Microsoft Corp., and Oracle Corp., do a less-than-perfect job of addressing the needs of all customers, however—particularly those in what Russom describes as a kind of high midrange.

The upshot, Russom has written, is that there’s an opportunity for Ascential, Informatica, SAS, and their midrange competitors to swim down and upstream, respectively, to snag these customers. “[T]here is no vendor with ETL-only revenue in the $40M-$80M range (2001-2002) or $40M-$120M range (2003),” Russom notes. “The three leading vendors of the high-market segment have cornered the market, and are 300 percent larger than their largest competitors of the middle segment. Since high-market growth is better than that of other segments, the gap will continue to increase.”

There are signs that ETL vendors are starting to take notice, however. Take Informatica, for example, which a few weeks ago touted a new hardware and software bundle—the Informatica IBM Dashboard Engine Appliance (IIDEA)—that was based in part on Informatica’s PowerCenter ETL tool. Officials position IIDEA as a strictly mid-market play, with a price tag $200,000, for starters—that’s designed to appeal to high-mid-market budgets.

"The companies that are in this space are transitioning from a start-up model and [need] the same kind of information-rich environments for continuing to manage customers, continuing their growth, and they have the same kind of compliance requirements that large companies have,” says Karen Steele, vice-president of corporate marketing with Informatica. Steele and other officials concur with Russom’s take on the opportunity for Informatica and its competitors in the high-mid-market: "That’s why we’re putting together a true bundle to target these mid-size companies that have data integration and business intelligence issues.”

Informatica competitor Ascential, for its part, sees a similar opportunity. “The medium enterprise market presents ample opportunity to Ascential Software,” confirms spokesperson Chas Kielt, who concedes that, like Informatica, most of Ascential’s uptake has been in large enterprise environments. “It is true that … the Ascential Enterprise Integration Suite has had significant traction in large enterprises,” Kielt concedes, arguing that Ascential’s strengths as a data integration vendor, and not just an ETL specialist, have helped in this regard.

At the same time, Kielt says, Ascential can certainly compete in the mid-market and high mid-market.

“[W]e also meet the needs of smaller organizations by selling many of our suite components independently, and ETL sales still account for a large portion of our revenue,” he says. “Additionally, buying from a single vendor greatly reduces risk and cost, and is very compelling to mid-size enterprises.”

Over on the other side of the aisle, some mid-market ETL vendors believe there’s an opportunity to swim upstream. Take Business Objects, which earlier this year released a new version of its Data Integrator ETL tool. At the time, Darren Cunningham, product marketing manager for Data Integrator, suggested that Business Objects’ revamped ETL tool could find traction among non-Data Integrator customers, even though he allowed that Business Objects probably isn’t the first vendor customers think about when it’s time to select an ETL offering. “We’re probably not going to be going in trying to sell only our data integration. Our most compelling value proposition is always going to be our strong integration with the business intelligence technology."

At the same time, he argues, the revamped Data Integrator gives Business Objects a chance to compete in enterprise environments of every size. “Some of them [potential customers], they have our BI tools, but then it’s an open RFI and we have to compete for ETL. Some of them don’t [have Business Objects BI tools] but they have SAP and they know what we can do there,” he says, noting that Data Integrator is based on the former Acta ETL tool, which was known for its integration with SAP. “Because of what we’ve done here [with Data Integrator 6.5], we have a lot of options in terms of how we can approach new customers.”