No leaders have emerged in the small but rapidly growing product information management (PIM) systems market, according...
to Gartner Inc.'s latest Magic Quadrant for PIM.
That probably won't change for at least a few years, according to Andrew White, research vice president with the Stamford, Conn.-based analyst firm and author of the study. The report ranked 10 PIM systems, software that delivers a single view of products that allow organizations to support e-commerce, supply chain management or manufacturing processes. Gartner also examined PIM purchasing trends, revealing a rapidly growing market, White said. Gartner expects the market to grow 40% to approximately $460 million in total software revenue in 2007, after jumping nearly 50% in 2006. And though smaller pure-plays and mega-vendors are vying for position, White doubts that large vendors such as IBM, Oracle and SAP will "seal up" the market any time soon.
The study placed each vendor that met the inclusion criteria into one of four quadrants, based on their vision and execution experience with customers.
Product information management systems rankings
The leadership quadrant, reserved for vendors with a strong vision and lots of customer experience, remains empty -- for good reasons, White said.
"Nobody dominates the market," he said. "Nobody understands the market completely. Nobody has a product that does it all. It's an old problem, but [PIM systems] are very new."
The challengers quadrant, for vendors with proven customer experience but less market vision, contains only IBM.
"IBM was in the visionary quadrant last year, so IBM probably assumed they might have become the leader this year," White said. "But they're going through a rewrite of their product, and there are a huge amount of unknowns, so they're really a challenger this year."
The code rewrite is expected to result in a new master data management (MDM) product that supports both PIM and customer data integration projects, he said. But IBM's MDM strategy may be a bit ahead of its time.
"This idea -- that one MDM system supports both CDI and PIM -- that's early," White said. "We don't expect to see that type of market emerge for two or three years, but IBM is doing it in 2007. They may be the first vendor to achieve that, if they can do it."
The visionary quadrant includes vendors with less customer experience but stronger vision. This quadrant included Palo Alto, Calif.-based Tibco Software Inc.; Gaithersburg, Md.-based GXS; and Dallas-based i2 Technologies Inc. These vendors have strong technology visions, White said, but they need to expand their functionality and customer base to move into the leaders quadrant.
The crowded niche quadrant had vendors that address a small segment of the market -- yet it included some big names. Oracle and SAP landed here, largely because they focused on their own products and installed base, the report indicated, even noting that "not all Oracle business applications that store or use product data integrate 'out of the box' or support asynchronous integration with the Oracle PIM Data Hub yet."
Other niche vendors ran the gamut of focus and functionality, White said. FullTilt Solutions Inc., based in Wayne, Pa., is strong in e-commerce, data syndication, catalogs and supply chain application environments. Heiler Software AG and Hybris are both based in Germany and both are focused on e-commerce and catalog-driven businesses. Houston-based Riversand Technologies Inc. has the only PIM product with a .NET architecture and was a featured partner in Microsoft's MDM announcement.
Categorizing product information management systems buyers
PIM buyers are also fragmented, and they are buying systems for different types of environments, White discovered.
Organizations with enterprise resource planning (ERP) systems present a common PIM scenario. Many ERP adopters got a single view of the financial transactions but never achieved a single view of product data, he said. That's because -- despite the vision of ERP as the single platform -- it's become just one system of many. Even within ERP, product data is often dispersed among multiple systems, he said. Some companies deal with this problem by creating alternate ERP instances to collect product data, but many are considering PIM now. ERP vendors Oracle and SAP are currently "defending" this space, he said, to ensure that customers don't invest in other vendors' PIM systems.
Another common set of PIM buyers have "extremely heterogeneous" multi-system environments, White said. This creates a complex PIM problem that ERP vendors like Oracle and SAP are not well versed at dealing with, he said, and that's where IBM and pure-play PIM vendors tend to excel.
How to review and buy product information management systems
PIM buyers' requirements can often be quite different. Some may need "buy-side" PIM, or a single view of products purchased, White said, while others need "sell-side" PIM, or a single view of products they're selling. Then, organizations must prioritize other business drivers for PIM purchases, such as e-commerce, supply chain or manufacturing process enhancement initiatives, since that could affect which pure-play vendors to evaluate. Further, a company's existing infrastructure may dictate available options. Shops with heavy Oracle investments will want to evaluate their PIM systems; those with .NET architecture may consider Riversand.
"There are a lot of factors to consider," White said, "including the [PIM vendor's] domain, industry experience, functionality, services and data quality -- where PIM vendors are relatively weak. Data quality tools help you actually get a single view of the data, because PIM doesn't really help you clean the data, it just helps you manage it."
Data quality is a prerequisite for PIM success, White said. Companies that already have data quality management software internally should ensure that PIM initiatives can use it.
Whichever PIM system a company chooses, the report warned that "because of the rapid growth of this market, you should expect gaps in functionality, and issues with scalability for the next couple of years." And, as is happening with the increasingly crowded MDM software market, buyers must proceed with caution and carefully vet potential vendors, White said.
"Confusion is rife," he said. "The hype in this market is reaching frenetic levels. It's not going to consolidate into a single market called MDM for a long time."