SAP Cozies up to Informatica

Why SAP’s newfound openness is a good thing—for customers and SAP alike.

On the surface, last week’s accord between ERP giant SAP AG and data integration specialist Informatica Corp. had all of the trappings of any other OEM arrangement. Beneath the surface, however, the deal underscores a new—and apparently authentic—openness on SAP’s part, which is good news, analysts say, both for customers and SAP alike.

First, the background: Informatica last week notched an OEM accord with SAP. The ERP giant plans to embed Informatica’s PowerCenter ETL tool, PowerExchange mainframe connectivity tool, and Metadata Manager software into its performance management (PM) and analytic applications. SAP also disclosed plans to embed all three products in its NetWeaver platform for master data management (MDM) and business intelligence (BI).

Over the last two years, SAP has grown steadily closer to Informatica—thanks mostly to IBM Corp.’s acquisition in March of 2005 of Ascential Software Corp., SAP’s then-preferred ETL partner. Just months later, in October of 2005, Informatica notched a "Master Relationship Agreement" with SAP to jointly market its data integration tools and services in tandem with SAP’s NetWeaver solution stack. The new agreement builds on this and other accords.

"This agreement with Informatica will enhance and extend SAP’s business solutions and allow our customers to access this best-in-class technology to … [drive] unparalleled visibility and management across an enterprise," said SAP senior vice-president Nimish Mehta, in a statement. "With this agreement, both our existing and new customers will benefit as Informatica and SAP work closely together to deliver … enterprise software to an ever-increasing customer base."

That’s the PR boilerplate. Under the coverse, however, there’s an important subtext, says Philip Russom, a senior manager with TDWI research. "OEM and reseller agreements come and go … , and it’s hard to say when one fledges whether it will make a difference for the original equipment provider, the reseller, or the end-user customer," comments Russom, who notes that, in this case, the SAP/Informatica accord is limited to advanced data management applications—and not to bread-and-butter applications like production reporting: "I’d guess that the dent it’ll make in the SAP customer base is likewise limited."

On the other hand, Russom says, there is something to be said for the Informatica/SAP accord—at least insofar as it underscore’s SAP’s commitment to openness, at least with respect to its NetWeaver ambitions. "The subtler message that this announcement screams is that SAP is continuing its relatively new commitment to openness. This is true, even if the limited-use license of Informatica PowerCenter provided through the agreement is only for bringing non-SAP data into SAP, but not the reverse," Russom indicates.

In this case, both SAP and rival Oracle are demonstrating a compelling comportment to openness. SAP’s accord with Informatica is a strong indicator, for one thing—but Oracle also licenses Informatica’s data integration technology for its BI applications, largely for use with Siebel Analytics.

"Personally, I think the openness of SAP NetWeaver is a good thing, because it helps users get a more complete view of organizational performance through more complete data integrated from beyond SAP," Russom concludes. "I feel the same way about Oracle Fusion Middleware, and I encourage all application vendors to follow the lead of SAP and Oracle, by helping users enhance their BI with data from diverse sources beyond the application brand."

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.