Informatica's Future Bright Thanks to
Officials forecast business almost as usual in 2009
Data integration (DI) stalwart Informatica Corp. has had quite a run over the last half-decade, chalking up double-digit annual growth and establishing itself as the industry's most prominent "independent" DI player.
Informatica's hot streak roughly coincides with a pair of milestones: the ascendance of CEO Sohaib Abbasi in mid-2004 and, less obviously, IBM Corp.'s acquisition of the former Ascential Software Corp. nearly four years ago. The latter event -- which at the time led some in the industry (including market prognosticator Gartner Inc.) to predict rough going for Informatica -- has paradoxically boosted the DI stalwarts fortunes.
Fast forward to 2009, when Informatica could again expect some rough going. Concern arose that bread-and-butter infrastructure investment projects -- including spending on both data warehouse (DW) generation tooling and broader enterprise-wide data integration efforts -- that have fueled much of Informatica's growth could dry up in the coming year as companies take stock, retrench, and sometimes kill costly projects.
Informatica officials don't seem worried. They concede that the economic climate is tough, but the BI and DW segments have in the past successfully weathered -- albeit with some damage -- the worst of economic storms.
More to the point, says senior vice-president of product management and marketing Adam Wilson, Informatica isn't just a one-trick pony when it comes to DI. Over the last decade, Wilson stresses, the company has diversified its portfolio with software-as-a-service, real-time DI, and broader enterprise-wide data integration practices. The latter category, he says, has more to do with what is still called enterprise application integration (EAI) than data federation. Inasmuch as they aim to tie together multiple (and often heterogeneous) operational systems, enterprisewide information integration and real-time DI are (to a degree) complementary technologies, Wilson indicates.
"From our perspective, a critical part of any process, any engineering effort, is the data aspect of things. Even if it's not driving revenue related to warehousing, we're seeing a pretty large increase in the amount of our business that's being driven beyond data integration in these operational integration scenarios. Currently, just over 50 percent of our business is unrelated to data warehousing. It's what we would call 'broader data integration,'" he explains.
"We're increasingly doing projects that are not just warehouse generation. That is a metric that we disclose on a quarterly basis, so it's something that can be easily verified. It's been a big part of our story. If you go out and you survey our customers, … increasingly folks who are getting the most value out of [their data integration] investments are really using us in these broader use cases."
Nearly a decade ago, Informatica started to make noises about ETL-driven EAI, touting PowerCenter as a near-real-time alternative to batch-driven ETL for EAI projects. More recently, this vision of an ETL-centric, near-real-time spin on EAI has morphed into one that emphasizes real-time or right-time access to information distributed across an enterprise: the so-called Real-Time Enterprise.
Last year, Informatica introduced a Real-Time edition of its DI suite, which it says gives customers a one-stop shop with which to pursue Real-Time Enterprise strategies. That product has since become one of Informatica's strongest sellers, Wilson maintains. Isn't the Real-Time Enterprise -- which advocates like to say is easily affordable (and skeptics claim comprises a budgetary black hole) -- the kind of project that's likely to be cancelled as soon as IT budgets contract?
Not at all, he indicates.
"I think that if we would look at that latency continuum, it's down to weeks, down to days, down to hours, down to minutes, down to seconds. Once you give someone that kind of access -- once you narrow that [latency] down to hours, say, from days -- they want it narrowed further," he claims. "With our Real-Time [product], we're able to provide transactionality, guaranteed delivery, once-and-only-once semantics so the number of use cases that customers can deploy our technologies against has really exploded."
In 2009, Informatica diversified in other respects, Wilson continues, citing its introduction of the Informatica Data Migration Suite. (Curiously, SAP AG last year announced a data migration offering of its own; see http://www.tdwi.org/News/display.aspx?ID=9222.)
This product, like Informatica's dedicated Real-Time suite, was developed in response to customer demand, he claims.
"We survey our customers every year … and we found that 60-plus percent of our customers indicated that they were using us for data migration projects. I think that that was a trend that we kind of spotted very early and decided that there was really a market out there that was not a tools market," he comments.
"There's this pattern with migration, where [the way organizations were doing it] was very manual, very one-off. It required a lot of scripting, which introduces a lot of risks into the equation." Informatica's Data Migration Suite also has a services component -- in this respect, a bona-fide "Migration Factory" operated by outsourcing and systems integration specialist WiPro.
"They're going to create a migration factory to do a lot of the actual migration offshore, again in a very cost-effective way. We've already closed a couple of deals through the WiPro partnership," Wilson says.
There's been consolidation in the DI segment over the last five years, with database leaders IBM and Oracle Corp. (which markets its own credible DI tool in Oracle Warehouse Builder, and which acquired DI specialist Sunopsis) positioning themselves as one-stop shops for data integration. In the case of Oracle and applications rival SAP AG -- which acquired Business Objects SA (proprietor of DI technology) -- the situation is more complex, as both vendors purport to address the DW generation end the operational or application integration aspects of DI: Oracle, with its Data Integrator (nee Sunopsis) tooling and SAP via its Business Objects Data Integrator product.
Both Oracle and SAP can tout best-in-class connectivity to (and integration with) their own application stacks, via their own tooling, even as Oracle and IBM -- along with Microsoft (which markets its own credible DI solution in SQL Server Integration Services) -- tout best-in-class DW generation vis-à-vis their RDBMS platforms.
Doesn't this complicate the situation for Informatica? Wilson both concedes and disputes the point, falling back on Informatica's positioning as a neutral party amid competing RDBMS and applications products.
"For us, it always comes back to an issue of focus and neutrality. There has been a lot of consolidation, yes, but with all of the consolidation that's going on, a lot of the large application vendors have decided that because of how strategic data is, they need to own the integration component. The thing is, they're optimizing [their DI components] for their own stacks, and we see that in the tech decisions that they make or in the go-to-market strategies that they employ," he comments. "I think there's a large segment of the population out there that says, 'We have a highly heterogeneous environment. We need a solution that's going to treat Microsoft the same as Oracle, IBM the same as Sybase,' and so on," Wilson continues.
"Customers need something that's going to take a vendor-agnostic approach to the marketplace. They're doing that because they also want to future-proof their investments. To the extent that they get locked into a vendor solution or stack, they're not able to move the data as nimbly in and out of those data models. … That creates friction and causes them to lose agility."
Fair enough, but aren't there scenarios in which -- particularly in shops that have overwhelming stakes in Oracle, SAP, or Microsoft -- the built-in optimizations of vendor-specific solutions make a lot of sense? To a degree, Wilson concedes, there are.
"I won't say that we never see accounts where they have so much Microsoft or Oracle that they decide it's not a good opportunity for Informatica or our value proposition," he acknowledges, "but we're still seeing quite a bit of success in Oracle environments, for example. From a targeting perspective, Oracle is probably still our number one target when we move data," Wilson says. "I think that for folks who are predominately Oracle and predominantly SAP, there are some of those environments that we don't play in and haven't played in historically, but I honestly believe that those environments where they are an SAP-only or an Oracle-only shop are the vast minority."