ETL Comes Roaring Back
ETL market could post 10 percent annual growth through 2006
It was no surprise that when IT budgets faced severe cuts in 2002, ETL revenues plummeted. The good news, according to consultancy Forrester Research, is that happy days are, in fact, back: ETL revenues recovered in 2003, and (moreover) should post encouraging growth over the next several years.
According to Forrester researcher Phil Russom, ETL-related spending increased by 17 percent least year. While explosive growth of this kind is atypical, Russom expects that the ETL market will continue to grow at an encouraging pace—that is, by 10 percent annually—through 2006.
This is welcome news to ETL vendors, of course, but also to the technologists who work with their offerings, says Russom, who argues that slow ETL growth in 2002 (3.05 percent change year-over-year) and rapid ETL growth in 2003 (16.93 percent year-over-year) effectively cancel one another out.
“Given the artificial nature of the divergent growth rates … seen in 2002 and 2003 respectively, any calculation of growth rate based on these would be strongly misleading if applied to forecasting market size for future years,” he writes. “Instead of successive-year comparisons, averaging these two growth rates yields a far more accurate and realistic growth rate.”
Even so, Russom acknowledges, growth in the neighborhood of 10 percent—while perfectly acceptable—is a far cry from the 30 percent (or more) annual growth the ETL market routinely posted during the roaring 90’s. This number is, however, “consistent with, though slightly conservative, compared to the post-boom 11 percent experienced in 2001,” he writes. “Forrester’s forecasts for the ETL market in calendar years 2004-2006 are realistic for the current economy and … should be easily attained.”
Forrester found that Informatica Corp. is number one in the ETL market, followed by SAS Institute Inc. and Ascential Software Corp. These three vendors, and a host of others, are vying for an ETL market that Russom believes will eclipse (though just barely) $1 billion in 2005. “The $1 [billion] mark is an important milestone, because it shows that ETL tools constitute a major category of IT product that has hit its prime and stabilized as a market,” he notes.
Although Informatica is still the market leader, runner-up SAS and third-place rival Ascential have both made strong gains at its expense, Russom finds, noting that Informatica’s market share declined from approximately 25 percent of the market in 2001 to about 23 percent of the market in 2003. SAS, for its part, grew its share strongly from 2001 (when it controlled about 13 percent of the ETL market) to 2002 (when it garnered almost 19 percent of ETL revenues), but slipped about 1 percent in 2003. Nevertheless, Russom writes, “SAS accounts for a far larger proportion of growth than any other vendor in the ETL market.”
On the other hand, Ascential is the only vendor among the top three to post solid growth in three consecutive years. The data integration specialist grew its share from about 13 percent in 2001 to almost 15 percent in 2003. The upshot, says Russom, is that it’s a competitive race for first place: “Informatica lost market share to Ascential and SAS three years in a row, and the two contenders are increasing ETL revenue at a far faster rate than Informatica is. If the current trend continues, SAS (and possibly Ascential, too) will catch up to Informatica in 2006.”
Elsewhere, DataMirror (at just under 10 percent), IBM (DB2 Warehouse Manager at about eight percent share), Microsoft (Data Transformation Services at approximately eight percent), Business Objects (at about seven percent), Ab Initio (Co>Operating System, nearly seven percent), Computer Associates International Inc. (Advantage DT, about six percent), and Oracle (Warehouse Builder, about six percent) round out the top 10.
What trends are driving ETL's uptick? Russom cites several, including (not surprisingly) data warehousing and business intelligence projects, which he says continue to account for the lion’s share (80 percent) of ETL usage. At the same time, Russom notes, 20 percent of ETL tool usage isn’t strictly confined to data warehousing, but, instead, supports activities such as database consolidations, migrations, and synchronizations.
Elsewhere, he says ETL is a common component in customer intelligence and customer data synchronization projects that scale across multiple IT systems. Russom also points to strong uptake among federal government agencies, which he says are introducing projects that place an increasing emphasis on ETL and data integration technologies.
Finally, the regulatory compliance environment (Sarbanes-Oxley and Basel II in particular) impose significant new reporting requirements on enterprise IT organizations, meaning that data must frequently be integrated from a number of disparate sources.
Looking ahead, when Radio Frequency Identification (RFID) lifts off in 2005, Russom speculates, “it will generate tremendous volumes of data that needs filtering, routing, and recording”—in other words, leading to the creation of RFID-centric data warehouses.
Editor's note: This article originally reported that consultancy META Group ranked Informatica, SAS, and Ascential as 1, 2, and 3, respectively, in its own market research study. That is incorrect. META Group's study did notattempt to quantify market share, but ranked ETL vendors on the basis of both "presence" and "performance." In the META Group study, Ascential ranked number one, followed by SAS and Informatica. The original article is corrected.
Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.