Speaking to industry analysts in Boston, Massachusetts last week, Informatica president and chief executive Sohaib Abbasi said: Our single goal is to become the dominant leader in the enterprise data integration space.
Abbasi said that achieving dominance will be made possible by taking a much broader focus on data integration at the enterprise level. By broader, Abbasi is referring to the market for so called operational data integration consisting of data migration, data synchronization, data migration, data replication, single version of the truth and so on.
Already Informatica is seeing a surge in customers using its core data integration platform for legacy data migration projects, which industry research says accounts for nearly 25% of integration dollars spent on IT projects today.
Research firm IDC pegs this $11bn operational data integration market to be more than five times bigger than the analytic data warehousing integration market which Informatica has focused on for much of its 11 year existence.
We’re aiming to grow out into [operational data integration] from our dominant position in data warehousing, Abbasi said. More and more of our data warehousing customers recognize that Informatica is the best way to move into these broader integration projects.
Abbasi pointed to current trends that are driving broader interest in data integration such as the move from departmental to enterprise requirements.
But it is the shift towards outsourcing models, such as business processing outsourcing (BPO), on-demand software-as-a-service, and total IT outsourcing, which he said holds the most promise in the long-run Abbasi believes the increased use of outsourcing is forcing companies to rethink their current data integration infrastructures.
As more and more functions get outsourced, the IT infrastructure gets more disaggregated and the data gets more fragmented, he said. Data silos that have existed within companies are now suddenly being stretched across organizational boundaries adding a new dimension of complexity.
Abbasi said that helping companies to overcome the integration headaches of cross-enterprise data integration is a promising long-term opportunity for Informatica, particularly in the areas of BPO and on-demand software environments.
Outsourcing is not a passing fad nor a reversible trend, he said. As more processes get outsourced to BPOs and on-demand providers the complexity rises for cross-enterprise data integration.
Abbasi pointed out that BPO, an outsourcing model that farms out key functions like payroll and human resources to external service providers, almost always requires the migration of data in-house to BPO providers.
Informatica’s own research shows that between 5% and 15% of a BPO management is data integration. BPO is a $70bn market, but so far little of it is automated, Abassi said.
The on-demand model, which delivers software-as-a subscription service, is now being driven by vendor initiatives like Salesforce.com, Siebel OnDemand, and Oracle E-Business Suite.
Typically decentralized companies will allow certain divisions to outsource some departmental business applications to Salesforce.com’s Sfroce or NetSuite’s NetFlex but at the same time require them to adhere to an in-house corporate standard like SAP. This invariably requires data migration as well as data synchronization, Abbasi noted.
As more and more processes get outsourced, the data collected by BPOs and on-demand software vendors increases in complexity, which in turn presents a significant challenge for cross-enterprise integration.
Of course what Abbasi is alluding to here is a new hosted data integration business model that banks on organizations letting someone do the integration for them. If all your data was held inside the company then you’d probably say ‘you’re kidding’, he said. But what about if it was held outside the organization? Offering cross-enterprise data integration as another hosted service is where the real opportunity lies.
Abbasi stressed importance of Informatica being an independent and took stab at its data integration rivals notably, Ascential (whose technology is likely to merge into IBM’s DB2 database and WebSphere middleware stack) and other database and business intelligence software providers that also bundle in data integration as part of their platforms.
The value of being independent is such a market is obvious, Abbasi said. He argues that after Ascential’s purchase, Informatica is the only remaining data integration vendor in the market that has a clear open strategy for accessing all databases, application servers, operating systems and hardware.
Trends towards openness, interoperability, reliability and the ability to gracefully evolve to corporate IT infrastructures of tomorrow reinforce the value of our independent stance, he said. The ambitions of all the leading relational database platform players conflicts with these requirements. Its unlikely that either Oracle or Microsoft will support DB2, and vice versa.
