More Mergers, Integration Features on Tap for MDM Market

Loraine Lawson

What's on tap for Master Data Management in the next five years? Plenty, it turns out, including more mergers and acquisitions, more support for data governance, and technologies and capabilities that will help ensure MDM doesn't become just another silo of information, according to recent research from The MDM Institute.


In a recent article for Information Management, The MDM Institute's chief research officer, Aaron Zones, outlines future MDM trends through 2013. To be honest, the headline, "10 Key Trends in MDM," is a bit too confining for what's actually in the article. While the trends have certainly been categorized into 10 "buckets," there's way more information than just 10 items.


For example, trend number two is "MDM Market Momentum," but it includes all of the following trend predictions:

  1. While Global 5000 enterprises will spend an average of $1 million on MDM software, they'll spend $3-4 million more for integration services.
  2. IBM, Oracle, SAP and Informatica offer SMB's entry-level MDM for $250,000 to $500,000.
  3. Mergers and acquisitions, the drive for sales leads, and compliance will be the drivers for funding MDM.
  4. IT-initiated MDM projects will struggle to justify the business value.
  5. There will be a skill shortage for MDM and data governance projects, leading to more work for systems integrators through 2012.


That's five predictions under one trend. See what I mean?


It's a long article, packed with stats and useful information, but a few things stood out to me as worth highlighting:

  • I mentioned that $3-4 million of MDM costs are for integrated services. That means that integration costs represent around a fourth of the costs for Global 5000 MDM projects. Even if you aren't surprised by the percentages, that's still an impressive sum.
  • Think really hard before you decide to buy, not build. While right now the prices for MDM are breath-taking and come in two sizes -- SMB Expensive ($250,000 to $500,000 for entry-level MDM from IBM, Oracle, SAP and Informatica) and Enterprise Break-the-Bank-expensive-Zornes says prices should drop this year, with megavendors offering new prices below $1 million. That, of course, doesn't include the integration costs.
  • Vendors will be adding more support for integration-related goodies in the coming years. In the near term, Zornes says vendors will "expose MDM capabilities as 'always on' SOA services in loosely coupled data integration architectures." That'll be the first step in ensuring MDM doesn't become just another information silo, but by 2013, you'll see vendors adding semantic database technologies.
  • Beware the systems integrator bait-and-switch. We saw this with SOA -- companies charging high prices for SOA consulting, a price that seemed fair given the veterans involved, but when it was time to actually do the work, those consultants sent less experienced workers.The talent shortage could create the same problem with MDM, with systems integrators sending in rookies for veterans, warns Zornes.
  • We're going to see more mergers and acquisitions in this space. This is the least surprising prediction, but what's useful here is the MDM Institute hazards some guesses as to how this might shake out over the long haul, as well as a look at how this will impact niche players.

Add Comment      Leave a comment on this blog post
Jun 1, 2010 3:22 AM Julie Hunt Julie Hunt  says:

So the mega-vendors list the starting point for so-called SMB MDM solutions as $250K - $500K-Yikes! IBM, Oracle, SAP and Informatica have a very skewed notion of 'SMB'.  More likely they are talking about extreme upper tier of Mid-Market / lowest tier of Enterprise, and even at that, the TCO for those vendor solutions would be outrageous. (Generally, total annual tech spend for mid-market upper tier can run $10M - $40M, and total annual tech spend for lowest tier of Enterprise can run $20M - $200M-for many companies in these tiers, tech spending may have been cut quite a bit over past few years.)

Yes! there are many benefits from implementing MDM for a lot of companies. But with so many solutions costly and complex to implement, there are significant barriers for wide-spread adoption.

Good informative post Loraine-thanks!


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