Informatica Buyout of Siperian Good News for MDM Shoppers

Loraine Lawson

Recently, I interviewed Siperian's senior director of product marketing, Ravi Shankar, and the company's new VP of solutions & field marketing, Kirk Millet, about multi-domain master data management. It's supposed to run next week.


Then yesterday, I receive an e-mail from Informatica: "Today, Informatica, the world's number one independent leader in data integration software, announced the acquisition of Siperian, a leader in Master Data Management (MDM)."


Things are changing fast in the MDM market, from this $130 million cash acquisition-the largest in Informatica's history-to the recent release of Talend's open source MDM tool. Rumors of IBM possibly acquiring Initiate, another primarily MDM vendor, also surfaced this week from the 451 Group, which had earlier theorized that SAP might also acquire an MDM company.


In an interview last summer, The Information Difference CEO and MDM analyst Andy Hayler predicted Informatica would acquire an MDM vendor. Instead, Informatica formed a partnership with Initiate, which in many ways is similar to and competitive with Siperian. Forrester listed both companies as "two MDM vendors to watch" in a 2009 report on PIM solutions -- available for free from MDM vendor Silver Creek Systems' Web site - and both both ranked as leaders in the third-quarter 2008 Forrester Wave evaluation of customer hubs.


So, Hayler was right, although who would have predicted Informatica would buy out Siperian, rather than Initiate?


Forrester principal analyst Rob Karel says he did back in 2008, adding in Thursday's blog post that the "impact this acquisition will have on the MDM market should be extraordinary to say the least." The deal will allow Informatica to "chip away" at major MDM players IBM, SAP and Oracle, but he adds, Oracle may be the most vulnerable in the long term.


Too bad for Oracle, but good for you, the end user, writes Karel:

This is only goodness for all MDM professionals. Now they have a truly application- and database-agnostic MDM giant they can consider as a viable alternative to the big three.

His complete analysis is long and thorough, with a look at how this will affect Siperian's existing customers.


Gartner's Andrew White, who follows MDM, was a lot more concise in his assessment, but writes that Informatica's acquisition as a positive sign for MDM:

The move is a great sign for the MDM market-it shows the growth we saw through 2009 (despite the recession) is attractive to vendors in related markets. Which vendors will get acquired next?

Bill Hewitt, president and CEO of MDM and BI vendor Kalido, issued this assessment via e-mail:

Informatica has long been rumored as a key acquisition target by one of the megavendors, but it has become increasingly clear that the megavendors have assembled their own stack of products to compete with their offerings. This acquisition is Informatica's attempt to level the playing field with IBM and Oracle by acquiring technology solely focused on managing customer master data, not every type of data. Informatica will level the playing field, but customers will be no more satisfied than they were before the acquisition.

He added Kalido is the "only independent MDM provider who can manage EVERY master data domain, giving customers the ability to have their master data management system match their business, not the opposite." However, the July Forrester report saw Kalido's MDM product not as a competing MDM solution, but "as a complement to operational MDM solutions like CDI and PIM because that operational master data can then be delivered through to Kalido's solution to then be consumed within analytical environments."


Incidentially, I asked Informatica's Ash Parikh about Informatica and MDM during our Q&A about Informatica 9. I didn't include his reply in the lengthy interview, but he ignored my hints about rumors, responding that "Informatica 9 is going to support MDM, the Informatica platform has always supported master data management, and it will do an even better job with Informatica 9."


If you'd like to see Informatica's official take on the Siperian acquisition, check out this video statement by Ivan Chong, senior vice president and general manager for data quality. It has all of the charm of a corporate training video, but he does explain why Informatica picked Siperian.


Informatica also posted fourth-quarter profits this week with license sales increasing 25 percent. Seeking Alpha published a transcript of the yesterday's earnings call. It's a mere 10 pages, so clear your calendar if you want to read it.

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Add Comment      Leave a comment on this blog post
Jan 30, 2010 10:19 AM Yves de Montcheuil Yves de Montcheuil  says:

There has been a great deal of activity in the master data management (MDM) market within just the last seven days. On Monday, Talend announced the availability of the first open source MDM solution, which was followed yesterday by Informatica's acquisition of MDM vendor Siperian.

We believe the two announcements represent two entirely different directions for the data management market. Talend's goal is to democratize the MDM market with an affordable, open source alternative at a fraction of the cost of cost-prohibitive and disjointed proprietary technologies. Even before we launched our MDM solution, we were witnessing a growing number of companies adopting Talend open source technologies, including smaller organizations who never had the budgetary means to adopt data management solutions including MDM.

In short, Talend's open source approach puts control into the hands of customers  Informatica's acquisition of Siperian represents business as usual in the proprietary software market; consolidation of closed, black-box technology in the hands of megavendors who control the entire data management stack chain and can dictate their terms to customers.

We believe the market will ultimately determine which of the two approaches makes the most sense.

Feb 3, 2010 6:36 PM Oliver Halter Oliver Halter  says:

Loraine, Great post. It makes sense that IBM is rumored to be considering purchasing Initiate. IBM would be an interesting play because one may argue that IBM already has CDI capabilities through their DWL based products. I believe that Initiate would be complimentary to IBM's existing portfolio because it implements a different style of CDI and would better integrate with IBM's Ascential based products such as InfoSphere Data Stage. But, if Initiate doesn't want to be acquired by IBM or someone else, it will have to forge strong partnerships with data integration players. Data quality and match providers such as Trillium, Data Flux, and Pitney Bowes will face a harder time in the market as customers are becoming more unlikely to try to implement CDI solutions themselves using their toolset.

I talk more about what this merger means for our customers at Diamond's Information Advantage blog.


I welcome your thoughts.


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