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Gartner Magic Quadrant ranks customer data integration software

Gartner's recent customer data integration Magic Quadrant reveals a maturing market, both in technology and complexity.

Customer data integration (CDI) isn't just for "brave" early adopters anymore, according to the analyst behind Gartner's recent Magic Quadrant.

Maturing technology, early evidence of others' success and increasing interest in master data management (MDM) have all made CDI more viable and desirable to a growing number of organizations, according to John Radcliffe, research vice president with the Stamford, Conn.-based analyst firm. This is the third year that Gartner has analyzed the market for CDI hub software, which helps organizations integrate and match information across databases and applications to gain a "single view of the truth" about customers.

The CDI market is very healthy and outperformed Gartner's estimates last year, Radcliffe said. Gartner originally predicted a market size of $275 million in 2006 -- a figure that instead came in at $310 million, he said. Now, the firm predicts that the CDI market will grow even more quickly in the coming years, bolstered by a growing interest in the similar discipline of product information management (PIM) and the long-term promise of MDM.

"By 2011, the market will approach $1 billion just for CDI," Radcliffe said. "So, if you added on PIM and other domains, you could see that it's pretty reasonable that it could be over $2 billion."

Out in the field, CDI implementations are growing in scale and complexity, Radcliffe said, as B2C companies tackle things like hierarchy management and B2B companies focus on issues such as master data workflow. Organizations are more often considering CDI as a first step toward MDM programs that will help them manage all types of master data, he added. Software vendors have noticed and responded.

Some who used to call themselves CDI vendors have been repositioning their software as MDM. These pure-play vendors, such as Siperian Inc. and Purisma Inc., are "aspirational" in calling their products MDM, Radcliffe said. They often have a core competency in CDI, the ability to do "lightweight" implementations with other data domains like product data, and plan to offer a full MDM suite -- eventually. While the longer-term positioning may make sense for the vendors, he said, the MDM label on CDI-enabling products could cause some confusion in the market.

But smaller CDI vendors aren't the only ones with designs on offering full-blown MDM products. Large vendors like Oracle Corp., SAP AG and IBM are busy building out MDM suites as well, Radcliffe said.

"They're trying to either extend an existing product, rework some of the things they've acquired or build a more cohesive suite capability for MDM across domains and across different use cases," Radcliffe said. "You'll see that particularly with IBM and Oracle -- and that will mean change for their customers over the next few years."

The entry of Microsoft into the MDM market was also an interesting market development, Radcliffe said. But as yet it's unclear how, and if, Microsoft's purchase of analytical MDM vendor Stratature will translate into a market presence in "deep, operational CDI," he said. Microsoft was not ranked on the CDI Magic Quadrant this year.

Customer data integration software product rankings

The firm's Magic Quadrant methodology places vendors that meet its inclusion criteria into one of four quadrants based on "completeness of vision" and ability to execute at customer sites.

The study put IBM and Oracle (Siebel UCM) in the leader's quadrant this year, the designation reserved for vendors with the strongest vision and execution. IBM was the only vendor in last year's CDI Magic Quadrant. But, now that Oracle's acquisition of Siebel is complete, Radcliffe said Siebel UCM (Universal Customer Master) has regained sales momentum and Oracle has demonstrated some successful large customer references. That was enough to move the UCM product from its former spot in the visionaries quadrant last year into a leadership position this year.

Oracle's other CDI product, Oracle Customer Data Hub, remained in the niche quadrant, where it appeared last year. This quadrant includes vendors that met the study's inclusion criteria but had less proven completeness of vision and ability to execute. Other niche vendors this year were SAP, Sun Microsystems Inc., DataFlux Corp. and VisionWare plc -- and a name new to the study, D&B. The information provider has not marketed its CDI product well over the last few years, Radcliffe said, though it made enough progress to be included in the study.

Specialists dominated the visionaries quadrant this year, reserved for vendors with notable vision but less proven execution at customers' sites. Siperian and Initiate Systems Inc. appeared again in this quadrant this year -- joined by Purisma, which moved over from the niche quadrant. This year, Purisma successfully appealed to a wider audience and increased its market channels, Radcliffe said, earning it the new placement.

The challengers quadrant, vendors with execution experience but less vision, was empty this year.

Reiterating customer data integration software buying advice

Gartner has not changed its advice for organizations purchasing CDI software much this year, Radcliffe said -- though new buyers and companies entering new phases of CDI may need to hear it again. Organizations need to truly understand their own requirements before they go shopping, he said -- and then they need to look beyond the CDI label during evaluations.

"People have to understand that these products are not all the same. They have different sweet spots, even if the vendor is claiming that they do everything," Radcliffe said.

In addition, organizations pursuing CDI must consider the other factors beyond technology early on, he said. He and other experts say that CDI often requires changes to organizational processes and emphasis on related disciplines, like data governance and data quality.

"It's not just about technology. If you think it is, then you're heading for a failure," Radcliffe said. "This is very much about getting the right data quality culture and getting the right organizational sponsorship and stakeholders behind CDI."

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