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Informatica and IBM MDM vendor acquisitions put MDM in the spotlight

With two major acquisitions and the release of the first open source master data management (MDM) platform, MDM technology may be primed for a resurgence.

Master data management (MDM) has yet to achieve mainstream adoption. It is often viewed as too immature, complex...

and expensive a technology to justify the investment.

The market for MDM technologies -- which aim to create a single view of master data for use throughout an organization's operational, transactional and analytical applications -- stands at around $1 billion, according to analysts, with adoption rates actually slowing as the weak economy continues to take its toll on IT budgets.

But with Informatica's purchase of Siperian and IBM's announcement that it plans to acquire Initiate Systems, MDM could be on the threshold of a significant increase in interest from more than just early adopters, according to industry watchers.

"I believe that MDM is rapidly moving beyond 'early adopters' in enterprises in a few industries toward the stage where it is being actively considered by a wide range of companies," said Andy Hayler, president and CEO of the U.K.-based research firm The Information Difference.

The moves are a clear illustration of the vendors' confidence in MDM as a viable market, Hayler said. And companies reluctant to fork over large sums to small, independent vendors for an unproven and complicated technology could be heartened by the acquisitions.

"The recent M&A activity validates the space and will give comfort to more conservative buyers who may not have been happy deploying such a strategic technology from smaller independents," Hayler said.

Informatica's move into the MDM market also gives companies  a fourth big-name MDM vendor to consider, in addition to IBM, Oracle and SAP.

"Customers out there, they were really trapped with the Big Three," said Rob Karel, an analyst with Cambridge, Mass.-based Forrester Research.

Yet another MDM option is open source MDM. Talend, which specializes in data integration and acquired open source MDM vendor Amalto in September, released the first open source MDM platform on the market last month. It goes for as little as $50,000 including support, according to Yves de Montcheuil, Talend's vice president of marketing.

But an increase in interest in MDM may not necessarily translate into a corresponding increase in actual deployments, according to Philip Lay, managing director of TCG Advisors, a San Bruno, Calif.-based IT consultancy.

"I think this could be an indicator [of increased interest in MDM]," but "MDM's adoption curve will almost certainly be a gradual one," Lay said. Even for companies that do make the investment, actual implementation will take time. "Adoption isn't necessarily implementation," he said.

As for those companies that have already launched MDM projects, with either Siperian or Initiate technology, the acquisitions should have a positive effect.

CareSpark, a nonprofit regional health information exchange in Kingsport, Tenn., has been using Initiate's MDM hub to consolidate patient and provider data since 2006. Executive director Liesa Jenkins said she was optimistic about the acquisition's impact on her MDM deployment.

"I would hope that's a marriage where we will be getting additional expertise and support [from IBM]," Jenkins said.

That is probably the case, according to Ray Wang, an analyst with Altimeter Group in San Mateo, Calif. While it could take IBM as long as 24 months to fully integrate Initiate's product line with its own MDM offerings, he said, Initiate customers should see some immediate benefits.

"Customers can expect IBM to integrate the product line over two years but benefit immediately from synergies with other IBM Information Management products such as its knowledge base of industry models, governance, BI [business intelligence] and performance management tools, and identity and management tools," Wang wrote in a blog post. "In general, non-IBM customers will gain new resources."

He added that existing Siperian MDM customers will likewise benefit from Informatica's market-leading data integration and data quality capabilities.

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