Mark Smith's Analyst Perspectives

At this year’s Informatica industry analyst conference (Twitter: #INFAAnalyst) to update the research and industry analyst community on its data integration and information infrastructure products. Looking back on my analysis of the company’s 2010 analyst summit, I see Informatica has made significant progress in gaining adoption of its products and influencing the new business technology landscape. Strong performance across the financial, product and customer dimensions helped it generate more than $650 million in revenue last year . In an economy in which the technology sector as a whole fell short of financial targets and customer growth goals, Informatica proved that it is possible to profit from an integrated set of technologies that help IT departments rationalize systems and achieve efficiencies in data management across databases and applications.

While most of the other major suppliers, such as IBM and Oracle, have blended their integration technologies into their larger middleware agenda, Informatica has made its technologies approachable by business and data analysts who need to take responsibility for their business data as the working relationship with IT evolves. Informatica’s tools are strong in usability across business roles beyond IT; this is a key differentiating point of its product line. It shows up, for example, in the Informatica Analyst and Business Glossary products; at its conference the company demonstrated how business and data analysts can manage data relationships and roles for governance and master data management. It showed also how data quality tools can shape up data within spreadsheets, like Microsoft Excel’s, by establishing normalization of data values.

Of course, it is one thing for a technology vendor to say it is going to engage with the lines of business and another to have business context in sync with line-of-business process perspectives. Our benchmark research in data governance found that over two-thirds of business people do not trust their data, and a large percentage (40%) place the highest priority on data quality and consistency. In addition the research finds the top level focus on customer, product and employee information that must be managed more efficiently across the myriad of applications and systems. Informatica realizes that lines of business are moving to cloud-based applications – and also that those are the new disconnected data silos, scattered across the Internet. In response Informatica has invested in cloud computing and particularly in helping business groups get access to data across the range of their cloud-based applications. Informatica provides integration technologies for use across the range of clouds (whether private, public or hybrid), which is a service of value to business that one of my colleagues has outlined (See: “Clouds are Raining Corporate Data”) and another has assessed.

Informatica still needs to deepen its expertise in line-of-business cloud computing that spans industries, such as customers, employees and sales, which have specific integration-related needs. For example, customer service operations in multichannel contact centers might need to interconnect potentially a dozen cloud-based applications and services to handle the new generation of customer interaction (from vendors such as Contactual, Five9, inContact, LiveOps and NewVoice Media) and contact center analytics (as from Enkata, Merced Systems and VPI). Likewise, HR and human capital management may need to support many talent management applications and services that require integration, such as ADP for payroll, SumTotal Systems for compensation, Plateau for learning and Taleo for hiring.

Such complexity is the practical reality in lines of business, confirmed by our business clients and research. There is opportunity here for Informatica to expand further its business and cloud computing efforts. To take advantage it will need to evolve its go to market competencies and technologically develop interconnects and publish them online; it cannot just leave this work to its partners or customers but do what it did in the past for on-premises applications integration with Oracle and SAP. The Informatica Marketplace is a step in the right direction, as are the data plugs with cloud computing integration that I wrote about in 2010. Right now it is easy for those in any line of business to get lost in the wilderness of integration and need better guidance from providers like Informatica. For the time being vendors like Informatica should realize that they need guidance and even hand-holding that requires further investments to meet growing demand.

Despite these areas for improvement, its focus on the business value of integration should help Informatica keep growing and persuade most of its customer base to move to Informatica 9; the company says 38% of existing customers already have upgraded. Informatica is stepping ahead with a high level of confidence that its business results have earned.

Let me know your thoughts or come and collaborate with me on Facebook, LinkedIn and Twitter.

Regards,

Mark Smith – CEO & EVP Research