Big vendors are dominating the product MDM software market and may be stunting innovation in the process, according to a new Gartner Magic Quadrant report.
The new research from Stamford, Conn.-based IT research firm Gartner Inc. shows three industry colossuses, SAP, IBM and Oracle, comprising almost half the market with their diverse -- and often confusing -- spread of product master data management (MDM) offerings.
"Look at IBM. They bought three [best-of-breed] solutions, they recently tried to merge the first two and failed, then they bought a third product, and now they're spending a number of years gradually converging the three," said Andrew White, a Gartner research vice president and one of the authors of the report. "It's like, why don't you just link them all together at the same time?"
An MDM strategy promotes the management of data across a number of key domains, including product, customer and finance, to ensure consistency of information throughout the enterprise. Product MDM tools help users achieve a "golden record" of product information that can be accessed by people and systems throughout an organization.
The annual Magic Quadrant for Master Data Management of Product Data Solutions ranks the top product MDM software vendors as leaders, challengers, visionaries and niche players based on several criteria, including "ability to execute" and "completeness of vision." This year's quadrant lists two separate offerings each from IBM and SAP, because the companies' products are independent offerings that fit the criteria for inclusion, according to the report.
The report positions Oracle and IBM's InfoSphere MDM Collaborative Edition product as leaders, while Tibco, Stibo Systems and Riversand are deemed visionaries. While there are no vendors listed in the challengers section, there is an abundance of niche players. They include Heiler Software, Hybris, both SAP's NetWeaver MDM and Master Data Governance for Material products, Informatica, Enterworks, Orchestra Networks, Agility and IBM's InfoSphere MDM Advanced Edition product.
Lackluster vision dampens market innovation
Through a plethora of acquisitions and the peddling of product suites to one-stop shoppers, big vendors have cornered the market, said White, who noted drastic changes from the old days when the fresh-faced heads of startups first kindled the product data realm.
"I've covered this space since it started, and the first round of vendors -- the small guys when it started -- were visionaries. [They] had real strong egos. They had a mission [and] a passion for this stuff," said White, who has seen these trendsetters replaced by software giants that don't even consider MDM a top priority.
"Their DNA is focused on much bigger issues even though MDM is central to their success," White said of companies like SAP, Oracle and IBM. "Rarely do these large vendors have a single executive with a single vision that stays there long enough to make it real."
And, at around seven years old, the product MDM market is too young for such complacency, according to White, who is still "waiting for real egos to step forward and push [the market] even further."
Gartner Magic Quadrant report: Today's product data market
While the market is led by big names, there are some other players in the report making some notable headway.
Stibo Systems, a Denmark-based MDM provider, moved up to the visionary quadrant, largely due to its customer focus, White said. User references regularly point to Stibo management's honesty and good reputation, which may be why the company flies under the radar. White noted that the company is "solidly working away with real good customer stores," but might not "get the credit because they are so modest."
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Whereas Stibo's marketing pitch isn't the "sexiest," according to White, Palo Alto, Calif.-based Tibco Software excels in attracting business users with its lively product demos. Visual MDM is the company's analytical user interface that uses visuals, such as a dashboard, to combine business metrics with alerts about data. For example, a little red flag in the corner of the dash may indicate the presence of untrusted data with bad quality metrics, thus melding critical business and data concepts. But since Tibco is a service-oriented architecture vendor, its MDM product doesn't get a lot of visibility, according to White, who thinks the company should be progressing more quickly.
A challenge MDM buyers are facing in today's market is the choice between traditional best-of-breed solutions and the increasingly emerging multi-domain, or generalist, vendor approaches. Currently, more targeted capabilities are still trumping the market, White said, probably because multi-domain options, such as those offered by Stibo, are still too broad too keep up with average user expectations.
When choosing whether to pursue a specifically aimed product or a more general one, White suggested considering the intricacy of the problem.
"Before you even worry about the type of vendor, try to understand the scale of complexity," he said. "If it looks ugly and hairy, chances are you're going to have to start with best-of-breed. But if [the] work flows are pretty simple, you could probably start [looking] at the generalists until you find they can't cope."
Despite more pointed products dominating the market today, White predicted a day when multi-domain products are more commonplace.
"It may be two to five years before we even think of a real multi-domain market emerging," he said.
For users trying to navigate the dense product MDM market, White cautioned against comparing all the vendors to each other, as many target different market segments and problems.
"The vendors are hyping this thing, and they are coming at it from different perspectives so you can't compare apples to apples," he said.