Lawson: Then, is it actually even possible for companies to really do data governance if the tools are fighting them?
Zornes: There’s a lot of custom data governance going on, with custom data governance being frameworks built and processes stood up to do this and then some sort of hand off to the hub people to code it.
We’ve been in this great global financial crisis for a while now and MDM is expensive. It’s a million or two for the software and if you're a large company, it’s three to four times that in services the first year to get it up, configure it, test it, rewrite apps and train your people. So you're talking about eight, 10 million dollars, somewhere in there, that first year.
We’ve done a number of surveys where we were watching the market in terms of its buying intentions. How much are they spending?
Then the Wall Street guys were watching analysts; you know, it’s a two-billion dollar software business out there that was being frozen by the economic crisis. Companies would budget money to have one view of their customers. They had all these programs ongoing and they had the money budgeted, but they were sitting on it because every company was nervous. It was really dicey for two years there.
And in those two years, say 2010 through 2012, where we really got concerned, is the IT department willing to spend a quarter million or a half million on data governance even if they couldn’t spend the 10 million dollars or so on MDM? They knew they had to get organized. They knew they had to set up their data governance councils and committees. They knew they had to understand the sources of their master data. They knew they had to set up some basic designs on what is a customer? What is a product?
They were willing to pay $50,000 for a strategy, and a quarter of a million dollars for some software and services to set it up. So there was a lot of custom stuff that was built, a lot of strategy work that was done, a lot of maturity assessments that were done and business value engineering exercises, where the consultancies would come in and charge you a quarter million dollars to tell you how bad things are and to tell you how to get from level one or level two maturity to level three, level four maturity and the various maturity models for data governance for MDM. So there was a lot of spend on data governance the last couple of years.
As a result, you saw a lot of consultancies jump on board and turn out things that were pretty good data governance. Companies like Back Office Associates, Utopia, Datum, EMC Consulting, which was huge in MDM and data governance. You know EMC is the in-memory company, but EMC Consulting is a very strong player when it comes to MDM and data governance in North America and northern Europe.
So a lot of the vendors all built more data governance frameworks and sometimes they would tailor them specifically to industries like financial services, capital markets, the stock brokerages.
Now we’ve got a lot of data governance processes that have been stood up and are executing well and it’s been hand-coded to interface them, integrate them with MDM hub A or B or C, whether it’s Informatica, IBM, Oracle, SAP, whatever.
That’s where we are.