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Gartner ranks IBM, Oracle tops in master data management for customer data

Jeff Kelly

When it comes to customer data, the more things change, the more they stay the same.

Gartner Inc. now refers to customer data integration (CDI) software, which helps companies consolidate

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data from disparate sources to gain a "single view of the truth" about customers, as master data management (MDM) for customer data.

But, whatever you call it, the recent Magic Quadrant report on the topic lists IBM and Oracle as the top vendors in the space, just as it did last year.

John Radcliffe, an analyst with the Stamford, Conn.-based research firm and the report's author, said Gartner changed the name to reflect a growing recognition of CDI as a "drill-down domain" of the larger discipline of MDM.

"Increasingly, we see convergence between different [data] domain areas, and we thought it a sensible time to start bringing these things together [under the umbrella of MDM]," Radcliffe said. MDM aims to ensure a consistent view of various data domains throughout an organization.

Representing around two-thirds of the overall MDM market, the customer data software segment grew to $352 million in 2007, a 15% increase over the previous year, according to Radcliffe. Of that number, software stalwarts IBM, Oracle and SAP together control more than 50%. Gartner predicts that the market will further consolidate in the coming years and will reach $1 billion by 2012.

Though not yet fully mature, MDM for customer data technology is growing steadily in sophistication, Radcliffe said. As a result, it's no longer just for aggressive early adopters but is safe and dependable enough for "mainstream adopters of new technologies," according to the report.

Radcliffe divided the main drivers of MDM for customer data into three categories: regulatory compliance and risk management concerns; cost savings through better efficiency; and growth through improved customer cross-selling and up-selling.

Some companies also view MDM as a "foundation for a number of other initiatives" – including end-to-end processes like order to cash, for example -- further fueling interest in CDI and other MDM subtopics, Radcliffe said. The fact is, however, that most vendors can't at this point address the full breadth of MDM needs.

Depth is also an issue. There are various use cases for MDM for customer data -- including operational, workflow and transactional analysis -- but currently no single vendor can address them all. Neither can most vendors address CDI issues for each particular vertical industry, Radcliffe said.

The bigger players, like IBM, Oracle and SAP, "certainly want to head in that direction" where they can address the full depth and breadth of MDM requirements, he said, "but they're not really there yet."

In two to three years, the larger software vendors will probably begin to approach comprehensive MDM capabilities, Radcliffe said, but most customers will still need multiple vendors to fulfill all their MDM needs, including customer data.

MDM for customer data software rankings

IBM took the top spot in Gartner's rankings -- which place vendors in one of four quadrants based on "completeness of vision" and "ability to execute" -- just beating out Oracle in the leaders' quadrant.

Leaders are those vendors that excel in both ability to execute and completeness of vision; challengers have the ability to execute but lack strong vision; visionaries are market-thought leaders, but they struggle with functionality issues; and niche players concentrate on just one or two specific segments of the customer data integration market, but do it well.

Radcliffe cited IBM's InfoSphere MDM Server as the leading CDI tool in the retail banking and insurance industries. "It is well-architected for SOAs, has a comprehensive data model for consumer and business customers, and provides strong hierarchy management and rich pre-built functionality," the report states.

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"[IBM's InfoSphere MDM Server] has some challenges in the wider MDM area, but if you are looking at customer data, and you want something particular for transactional environments, then it's a very good, very comprehensive product," Radcliffe said.

Oracle made the leaders' quadrant largely thanks to its Siebel Universal Customer Master (UCM) application. Oracle acquired Siebel in January 2006. Radcliffe said UCM is particularly suitable for telecommunications, media and utility companies -- and, especially, organizations that use Siebel's customer relationship management application.

SAP was placed in the niche players' quadrant. Despite a large and loyal user base, SAP appeals mainly to companies heavily invested in other SAP software, making "few shortlists in non-SAP-centric heterogeneous environments," according to the report.

Besides IBM, Oracle and SAP, the report said that a number of best-of-breed vendors of MDM for customer data "continue to differentiate themselves based on their capabilities and strengths in key vertical industries." Though lacking large revenue streams, Initiate Systems, for one, is popular with public sector and healthcare organizations, while Siperian continues "to do well in the life sciences industry," the report says.

Both vendors were in the visionaries' quadrant, along with D&B Purisma, Oracle's Customer Data Hub (which was ranked separately from Siebel UCM), Sun Microsystems, Tibco Software and DataFlux. No vendors qualified for the challengers' quadrant.

MDM for customer data software buying advice

Companies evaluating MDM for customer data vendors, while taking a long-term view of their overall MDM strategy, must also recognize that their preferred vendor may not be able to satisfy all their MDM needs right now, Radcliffe said.

"You may find that your strategic vendor cannot really do the job at the moment," he said. "You may have to go with a best-of-breed vendor" even if you plan to return to your strategic vendor when its capabilities have caught up to your needs.

Radcliffe also urged companies to recognize that MDM for customer data is not just an IT-related issue. Business stakeholders should be involved in the vendor selection and implementation process to define "what success will look like." This is especially important for large and fragmented organizations in which some departments are less inclined to cooperate or share data with others.

"It's very necessary for IT at the earliest opportunity to try and get good business sponsors and stakeholders involved," Radcliffe said, "and to get them to give views on what the business value [of MDM for customer data] would be."


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