Trouble Brewing Between SAP and Big Blue?

Does IBM’s new master data management pitch take SAP, Oracle, and other enterprise applications vendors out of the loop?

At its inaugural Information Integration Live! user conference held earlier this month in Las Vegas, IBM Corp. announced a variety of new or updated data-integration offerings.

Attendees might have had data integration on the brain, but the focus at Big Blue’s first-ever Integration Live! user gala was on a very specific kind of data integration—namely, master data management (MDM), an emerging technology practice that (IBM officials say) touches upon virtually every aspect of enterprise information integration.

“Broadly the idea of master data management [is] to provide a set of services for managing very comprehensively key objects across the enterprise, so whether they are customers or products or suppliers or employees, the idea is to manage this information so you get one version of the truth about these objects, and you get a completely comprehensive representation of those objects,” explains Dan Druker, director of master data management with IBM.

The impetus for MDM is information anarchy, says Druker. By dint of poor planning, budget cuts, or mergers and acquisitions, most organizations have multiple repositories of overlapping data scattered across the enterprise. Perhaps they invested in a now-defunct manufacturing resource planning (MRP) system, but for budgetary reasons simply can’t afford to implement a new solution. Or, just as likely, perhaps they’ve acquired multiple MRP systems as part of merger or acquisition activity over the years. “The idea is to bring together everything you know about a product, everything you know about a customer, all of the different e-mails you’ve exchanged with them. By doing this with master data management, it really gets to making sure that everybody in the company understands the information in a certain way,” Druker says.

Carpe MDM

Big Blue’s MDM product blitz couldn’t have come at a better time. MDM is fast going mainstream: large ISVs such as SAP AG and Oracle Corp. already market MDM-specific offerings of their own, while business intelligence (BI) players such as Hyperion Solutions Corp., Informatica Corp., Teradata (a division of NCR Corp.), and others have announced MDM-related initiatives. But the breadth of extant MDM offerings underscores a danger for Big Blue, particularly with respect to Ur-ERP vendor SAP.

MDM promises to consolidate and reconcile multiple, independent, and often overlapping data sources across an enterprise. For this reason, there’s a sense in which IBM’s MDM middleware pitch proposes to take SAP, Oracle Corp., and other (albeit smaller) enterprise applications vendors out of the loop, so to speak.

After all, one of the biggest selling points of SAP’s enterprise applications stack—which encompasses not just traditional ERP applications (financials, human resources, etc.), but also supply chain management (SCM), procurement management, MRP, and other modules—is that it’s a one-stop-shop, data-wise.

For example, a company doesn’t necessarily need to worry about reconciling supplier or partner SKUs (e.g., Cogswell’s Cogs calls a particular product a “Cog” while Spaceley’s Sprockets calls the same product a “Sprocket”). SAP’s NetWeaver MDM services can reconcile the disparities for them. What’s more, SAP positions NetWeaver as a much broader integration platform, such that organizations can tap NetWeaver connectivity and NetWeaver MDM capabilities to bring non-SAP applications and data into the fold, too. It’s an important concession of sorts for SAP. After all, even the most loyal of large SAP customers has non-SAP data somewhere internally.

Enter Big Blue

Then there’s IBM. When Big Blue purchased the former Ascential Software Corp. for $1.1 billion in March, it immediately became the player to beat in the data integration space. After all, Ascential gave IBM best-of-breed ETL, data-quality, and data-profiling capabilities, along with metadata management technology, too (see

Moreover, the Ascential acquisition was just one of Big Blue’s many data integration-specific acquisitions: before Ascential, IBM had purchased product data specialist Trigo and unstructured data whiz Venetica; after Ascential, Big Blue nabbed customer data specialist DWL. On paper, these capabilities, in tandem with its homegrown data federation technology, gave IBM the industry’s only feature-complete data integration stack.

“They made some best of breed acquisitions. Now the real challenge for IBM is to go ahead and integrate the integration stack,” quips Mike Schiff, a principal with data warehousing and BI consultancy MAS Strategies.

With WebSphere Customer Center (for customer-centric data), WebSphere Product Center (for product-centric data), and WebSphere Metadata Server (for service-enabled metadata management), IBM is starting to do just that, at least with respect to its Trigo, DWL, and Ascential metadata management acquisitions, that is. WebSphere Customer Center is based on the former Trigo technologies which has been available for some time. Big Blue is billing WebSphere Customer Center 6.0 as an all-new product, but it’s largely a repackaged version of DWL’s Customer Center 6.0. Druker says IBM has done some integration work to tie it in with the rest of its WebSphere integration stack.

As for WebSphere Metadata Server, it’s based on the former Ascential Software’s metadata management technology. It isn’t yet available, and won’t be for several months. IBM says it will ship with WebSphere DataStage (nee Ascential DataStage) in the spring of next year.

Trouble Brewing Between IBM and SAP?

Just weeks after IBM acquired Ascential, SAP terminated its long-standing OEM relationship with the latter company. Interviewed last month, Lothar Schubert, director of NetWeaver solution marketing with SAP, said his company’s decision wasn’t explicitly motivated by IBM’s move. He acknowledged, however, that SAP wasn’t entirely comfortable with the idea of its tier-one integration partner (i.e., Ascential) being consumed by Big Blue.

There’s a back story here. SAP and IBM are partners in many markets (for example, they’ve collaborated on a version of DB2 optimized for SAP’s ERP software), but they’re competitors in the data integration middleware space. Just how fiercely competitive they'll be remains to be seen. Both companies are still loath to explicitly criticize one another.

“The timing [of the end of the OEM relationship] was really just coincidental,” argues Schubert. “It was really because we feel NetWeaver is mature enough now, so now we are able to offer the same [integration] capabilities with NetWeaver. You could read into the timing of [the announcement] if you want, but it was really just a case of overlap.”

A more mature NetWeaver or no, SAP recently announced a global master relationship agreement with data integration pure play (and IBM ETL arch-competitor) Informatica Corp.

What’s going on here? To a large extent, SAP’s NetWeaver and Oracle’s Fusion initiatives are concessions to the reality of heterogeneity. No customer is going to have a completely SAP- or Oracle-based environment. With NetWeaver and Fusion, SAP and Oracle propose to accommodate the heterogeneous data-access requirements of their customers while keeping their bread-and-butter application software at the heart of things.

IBM’s middleware vision displaces the primacy of the ERP vendors. It’s probably too much to say that customers who embrace Big Blue’s WebSphere data integration middleware can pick and choose from between and among best-of-breed financial, SCM, and MRP (among others) products for their enterprise application needs. If nothing else, however, IBM’s data integration and MDM middleware stack does give customers an alternative to SAP and Oracle.

As MAS Strategies’ Schiff points out, Big Blue could nudge SAP and Oracle slightly toward the periphery, so to speak, while its integration middleware (which includes the DB2 database according to IBM's definition) takes center stage. In this respect, Schiff says Big Blue’s MDM announcements help flesh out its data-integration vision.

“IBM doesn’t want to be an applications vendor, but all applications need a common set of reference data to work with. From that sense, [the MDM announcements] would fit in. It sort of extends their middleware story; it isn’t just a blank announcement."

This isn’t quite IBM’s MDM pitch, of course. In fact, Big Blue positions its MDM portfolio as a complement to ERP applications from SAP, Oracle, and other players. On top of this, says Druker, the WebSphere MDM tools should also complement or enhance SAP’s NetWeaver and Oracle’s ProjectFusion integration middleware initiatives.

“IBM middleware, which is really the category that this master data management software is in, is a tremendous complement for SAP applications customers. We have a very, very large percentage of our hundreds of clients are absolutely SAP customers, too,” Druker comments.

Nevertheless, Druker takes a few shots at the middleware ambitions of both SAP and Oracle. “But as SAP tries to enter the infrastructure world with NetWeaver, that’s kind of the emerging battle. IBM’s integration portfolio is so much richer. … with WebSphere Data Integration, all of the capabilities we have with master data solutions, IBM’s integration portfolio is just very, very rich, and you just won’t find the same capabilities in the infrastructure product families in SAP NetWeaver and Oracle Fusion.”