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Gartner CDI study picks the market leaders

Gartner's Magic Quadrant for customer data integration hubs names the market leaders and some potential pitfalls. This year, one company came out in front.

The customer data integration (CDI) hub software market is maturing -- but adolescent growing pains are inevitable, according to a recent study.

The Magic Quadrant for CDI hubs, by Stamford, Conn.-based Gartner Inc., evaluated software products that support global identification and synchronization of data to deliver a single customer view. It's a difficult market to categorize, according to John Radcliffe, research vice president with Gartner. Architectural approaches to CDI hub software vary, ranging from physical, persistent master hubs to a registry style, with more virtual techniques for identifying and linking customers. Also, the maturing of the market and lack of best practices make CDI hub comparisons a challenge for both companies and analysts, Radcliffe said.

"[The CDI hubs] have different sweet spots. It is difficult to compare them. Although one is shown in the leader's box, for any given organization, that may not be the best choice. Think about it in the context of what you are actually trying to do in your situation," Radcliffe advised.

The market continues to grow. It brought in more than $120 million in new license revenue in 2005 and is expected to grow to $400 million by 2010, according to Gartner forecasts.

IBM is the sole vendor in the leader's quadrant for its WebSphere Customer Center, which was enabled by its acquisition of DWL last year. It's a strong product, according to Radcliffe, especially in the transaction hub area. Last year's Magic Quadrant did not place any product in the leader's quadrant -- an indication of a young market, he added. This year, IBM was just barely named a leader, he said, and no vendors were named challengers.

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The three vendors in the visionary quadrant were Siebel Systems Inc., Initiate Systems Inc., and Siperian Inc. Pure-play vendor Siperian made the category with the flexibility of its data model and general innovation. Initiate competes on its flexible hybrid approach, with both registry and persistent hub features, and a base of large reference customers, Radcliffe said. Although Oracle acquired Siebel last year, fueling speculation about its CDI strategy, both Oracle's Customer Data Hub and Siebel's Universal Customer Master are still offered separately, and both appear in the study, though in different quadrants. Siebel's innovation and high-quality customer references put it in the visionary section, Radcliffe said, while the less-mature Oracle product landed in the niche quadrant.

The bulk of the vendors appeared in the niche quadrant because they focus on a small segment of the market, lag in innovation and development, or, in the case of Purisma Inc., have an innovative product but lack the scale and install base required to solidify their market position, Radcliffe said. In addition to Purisma and Oracle, vendors SAP, VisionWare plc, Sun Microsystems Inc., DataFlux Corp. and Cordys Inc. appeared in the niche quadrant.

VisionWare is the main .NET-based CDI vendor and often works in partnership with Microsoft, Radcliffe explained. SAP is doing better on CDI than it was last year, thanks to its acquisition of master data management (MDM) vendor A2i. SAP is poised to be a serious player and has the unique ability to sell into its sizable existing customer base, Radcliffe said, but the product is lagging in functionality and is not yet actually implemented by many customers.

The new entrants to the CDI market included Sun Microsystems, which is just starting to push the CDI concept following its acquisition of SeeBeyond, Radcliffe said. Other quadrant newbies were DataFlux, which introduced a service-oriented architecture (SOA)-ready CDI hub this year, and Cordys, a European application platform suite vendor that also unveiled new MDM and CDI products this year. These companies show promise, Radcliffe said, but have a ways to go in developing their product features and customer base.

Overall, all vendors studied will probably benefit from the "enormous amount of interest" in CDI, Radcliffe said. The market is shifting because of CDI-development efforts by major infrastructure "mega" vendors such as Oracle/Siebel, SAP and IBM. These vendors are poised to take more than 50% of the market simply by selling into their existing customer bases. But companies that adopt a CDI hub because it's from a preferred mega-vendor potentially risk adopting immature products or technology approaches that aren't the best fit for their requirements, Radcliffe warned. Companies and vendors will all learn some valuable lessons this year.

Best practices will emerge for understanding the technical variations and benefits of different approaches, according to Radcliffe. Companies will also start to appreciate the organizational requirements of implementing CDI hubs. Not all experiences will be positive, he warned.

"What typically comes with this kind of expansion of a market, and all these people buying, is that some people get it wrong, sometimes because they choose the wrong product for their requirements. But probably more of the time, they think technology is the only thing involved. Particularly if you go with a physical data hub -- there are a lot of organizational, cultural and political issues involved; it's not just about technology -- there are all these other things that need to be sorted out," Radcliffe concluded.

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