Informatica Ups the MDM Stakes

Informatica's acquisition of MDM specialist Siperian highlights both the growth of MDM as a technology and the mounting pressure of market forces.

Informatica Corp. has demonstrated a recent knack for smart partnering or acquisitions. It arguably burnished that reputation with its acquisition late last month of master data management (MDM) vendor Siperian.

Last year, Informatica formalized an accord with Hewlett-Packard Co. (HP) -- a pairing (long informal) that analysts had been talking up for quite some time (see The Siperian acquisition -- like Informatica's formalized partnership with HP -- both makes sense and poses several new challenges, particularly with respect to partnering or co-opetition.

Siperian is a long-standing Informatica OEM customer. It licensed identity-resolution technology from the former Identity Systems, which Informatica acquired in 2008, for use with its MDM product. Similarly, Siperian is one of the best-known names in what's called multi-domain MDM -- MDM that offers over-arching data management and addresses several business domains such as product or customer data. Similarly, Siperian at least notionally makes Informatica an overnight MDM contender. Market watchers such as Forrester and Gartner Inc., along with the MDM Institute, recognized Siperian as one of the most prominent MDM pure-plays.

Until now, Informatica's MDM strategy has largely been peripheral. It had most of the tools (e.g., data integration, data quality, data profiling, and identity resolution) but tended to partner with bigger or best-of-breed players to promote MDM-oriented offerings or services. Its partnership with HP, for example, includes an MDM services component.

What's risky about the acquisition of Siperian is that it imperils Informatica's existing MDM partnerships (especially with Oracle Corp.) and compromises its neutrality pitch. Since it divested itself of its former BI reporting assets seven years ago, Informatica has relentlessly positioned itself as a DI-only player, promoting both its neutrality and its platform- or technology agnosticism.

It's a risk Informatica officials seem comfortable with. "We've been monitoring the MDM marketplace for some time. The major approach that we've adopted is to help organizations provide almost the foundational layer for MDM, so we've had partnerships with a number of MDM providers," says Informatica chief marketing officer Chris Boorman, who concedes that -- outside of an OEM relationship (Siperian resold Informatica's identity resolution technology) -- the two companies did not have an MDM-oriented relationship.

"As far as going forward in terms of relationships, we will be focusing our sales organization on promoting the Siperian MDM solution, because that's our chosen MDM solution and technology. We will continue to have relationships with other MDM providers," Boorman says. "We have a relationship with Oracle based on some of the ways [in which] they provide MDM solutions for their applications, and I would imagine that these [Oracle and similar] MDM relationships would continue."

This isn't far-fetched when it comes to ongoing co-opetition with Oracle. In particular, over the last four years Oracle has positioned itself as a DI power-player, enhancing its Oracle Warehouse Builder (OWB) offering, acquiring extract, transform, and load (ELT) specialist Sunopsis, and picking up data replication pure-play Golden Gate Software. Oracle even renewed (and expanded slightly) its relationship with DI pure-play Informatica.

"Our partnership with Oracle is, I think, valuable to Oracle because it demonstrates to their customers that they [Oracle] are willing to do what it takes to address their platform needs. [There are] no customers that just have one platform … no customers that have just one database. Oracle gets that," Boorman says.

Although the acquisition of Siperian clearly makes it a full-fledged MDM vendor, Informatica still plans to trumpet its neutrality. "Neutrality is an enormous value proposition. When [CEO] Sohaib [Abassi] came on board, he focused the company on the data integration space. We pulled out of the BI space and focused entirely on driving the utilization of data integration across a broad range of use cases … and in order to do that effectively, neutrality is critical, and I think that's one of the signature value propositions that clients enjoy with Informatica."

This isn't far-fetched, either. The key issue, experts say, concerns the mainstreaming of MDM. As usage widens, MDM is increasingly cast as an essential data integration service.

"The good news [for MDM] is that it's really starting to be institutionalized as part of the formal information management architecture. MDM has a permanent seat at the table," argued MDM visionary Jill Dyché, a principal with Baseline Consulting, in a December interview. Dyché has been prescient on both the MDM-as-a-technology and MDM-as-a-market fronts, forecasting a recession-related quiescence of MDM activity. Late last year she predicted an upcoming (post-recession) round of MDM consolidation (see

Informatica's acquisition of Siperian is a case in point. In December, Dyché stressed that Informatica already had most (if not all) of the requisite pieces of an MDM offering. If anything, she suggested, it might make an MDM-related acquisition chiefly to make a name for itself and stake its claim to best-of-breed MDM.

"Then there's the Informaticas of the world who have all of the pieces, [and] who are calling themselves an MDM company. If you have all of the pieces already, do you really need an MDM product, or can you configure the pieces to actually deliver MDM functionality?" she points out.

"For Informatica in particular, it's probably a case of them saying, 'Hey, we already have data quality! Hey, we already have a matching tool!' Or, 'Hey, we already have SOA capabilities to link back to the operational [systems]. What they're missing is a [branded or explicit] MDM product.'"

Dyché appears prescient in still another important respect. In December, she predicted -- and somewhat bemoaned -- the inevitable blurring of the distinction between MDM and data integration. Although she believes it's beneficial to see MDM as an "essential" DI service, Dyché stops short of endorsing MDM's complete absorption as a part or cog of DI.

The Siperian acquisition scenario -- in which a prominent DI player gobbled up a best-of-breed MDM player -- makes the case for MDM absorption, for better or worse. This is basically the same scenario Dyché predicted late last year.

"[J]ust as everybody was starting to distinguish the distinct value of MDM -- versus something like an operational data store, versus the data warehouse -- the lines will blur again as everything gets poured into that one data integration bucket," she argued.

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