The Good News about MDM Market Consolidation

In which Jill stays high on MDM.

Crowd_photo by Sreejith K via Flickr (Creative Commons)

I usually root for the little guy, so when I first heard the rumor that there were multiple bidders for Siperian, I figured that SAP would take it home and that it really was a three-vendor world. With revenues passing the half-billion mark, it seems that Informatica is joining the ranks of the big guys after all.

I agree with those in the analyst community who say that Informatica’s purchase of Siperian will be good for both companies. (Check out great posts from Rob Karel and Merv Adrian.) Last year, Informatica’s MDM story verged on the schizophrenic as the company simultaneously advocated a “roll your own” approach to MDM using various software components while at the same time making investments in both Siperian and rival Initiate Systems.

Siperian fills in some significant voids in Informatica’s MDM capabilities, most notably hierarchy management and transaction integration—updating the golden record in real time. While Informatica supports message-based data passing in real time, with Siperian, real-time data requests will soon be a reality. In return, Siperian will now have the power of the Informatica sales force and a new set …

In which Jill stays high on MDM.

When Evan and I were writing our book on Customer Data Integration and MDM, we knew we had to write about “the stack” and we knew—despite comprehensive chapters on data governance, data quality, and implementation methodologies—a lot of text would smack of back-office infrastructure. Let’s be honest. Companies that invested in software from Purisma (before D&B acquired them) and Stratature (before they were snapped up by Microsoft) were early adopters. IT organizations that bought these toolsets were laser-focused on narrow, yet high-impact, business problems, and were willing to invest in targeted solutions from smaller niche players.

So we wrote a chapter on making the business case in which we presented a litany of industry-specific MDM value propositions. The truth is that MDM is a business solution, and vendors should sell it accordingly.

Whether you’re tackling state reporting compliance in the pharmaceutical industry, account consolidation in banking, master patient index in healthcare, channel obliteration in retail—the lists go on and on—MDM can solve the problem more quickly and effectively than custom code. Or—as now Informatica would admit—than an ETL tool. As Siperian’s multiple pharmaceutical customers will attest, the ROI for MDM is in the industry business problem.

Informatica CMO Chris Boorman’s spirits were high when I talked to him on Friday. “We’ve thought a lot about MDM as a key piece of our overall data integration strategy,” he said. “And we’ve embraced Siperian’s concept of a ‘trust framework,’ for data. The ability to assign a confidence level to data is a differentiator.”

My confidence level that other MDM acquisitions are on the horizon? High.

Photo by Sreejith K via Flickr (Creative Commons License)

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