Informatica and IBM far and away top Gartner's recent data integration software vendor rankings. But the two market leaders could face significant challenges from integration upstarts SAP and Oracle as the two mega-vendors flesh out their data integration portfolios.
Oracle, in particular, is in prime position to gain market share, according to Gartner, with the addition of data federation and data replication capabilities thanks to its acquisitions of BEA Systems and GoldenGate Software, respectively, and its large installed base.
"Through the combination of these various products, Oracle is increasingly well positioned to address customers' needs across the full range of their data integration requirements," wrote analyst Ted Friedman in Gartner's Magic Quadrant report for data integration tools.
Oracle's data integration evolution mirrors the development of the market as a whole, according to Friedman. As customers begin to appreciate the diversity of their data integration scenarios, previously distinct subsets of data integration styles – namely federation and replication -- are converging as vendors expand their offerings both organically and, as Oracle has, through acquisition, he said.
"In 2009, we saw more vendors take more action on that idea of convergence," Friedman said in an interview. "Buyers in the market are starting to look for that more and more."
Gartner places vendors in one of four categories, or quadrants. Leaders are those vendors that excel in both ability to execute and completeness of vision; challengers have the ability to execute but lack strong vision; visionaries are market-thought leaders, but they struggle with functionality issues; and niche players concentrate on just one or two specific segments of the data integration market.
The data integration market overall continued to grow, reaching an estimated $1.38 billion by the end of 2008. Friedman credited the market's continued growth, despite a down economy, to buyers' desire to improve efficiencies through better use of data and an increase in data migration projects resulting from mergers and acquisitions and legacy upgrades.
"Better approaches to data integration helped organizations to be more efficient during the recession," Friedman said.
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For the first time, an open source data integration vendor made its way into Gartner's rankings. In previous years, the Stamford, Conn.-based research firm found that no open source vendor met the functionality criteria it used for inclusion in the rankings.
Talend, an open source data integration vendor based in Los Altos, Calif., bucked that trend, landing in the visionaries' quadrant. Talend has gained considerable "mind share" thanks to its ability to deliver good, if not great, integration capabilities at a low price via its subscription model, Friedman wrote.
Still, most open source data integration vendors have significant functionality gaps compared with their commercial counterparts, he said. And it remains to be seen whether the subscription model employed by many open source vendors will prove more attractive than traditional commercial software licenses.
Informatica still leads the data integration pack
Still leading the market is Informatica. The long-established data integration vendor retained its top spot in the rankings thanks to its references from customers, most of whom have standardized their integration technology on Informatica, the report states.
"[Informatica] continues to deliver high-quality product releases, well aligned with current market demand and evolving trends," Friedman wrote, noting that the vendor has expanded its offerings through both organic growth and acquisitions. Released earlier this year, Informatica 9, for example, includes a blend of extract, transform and load (ETL) functionality and data federation capabilities.
The report cautions, however, that Informatica's historical lack of focus on data federation and data virtualization could put the vendor at a disadvantage as demand for such capabilities rises.
Just behind Informatica in the leaders' quadrant was IBM. Like Informatica's, the majority of IBM's customers have standardized their data integration jobs on the vendor but also count "more multi-project use and larger average numbers of data integration developers per customer than most of its competitors."
"IBM and Informatica continue to be thought-leaders [among data integration vendors]," Friedman said, and they are responsible for most of the innovation in the market. He characterized Oracle as a "fast-follower," quickly identifying and copying Informatica and IBM's lead.
SAP, which rounded out the leaders' quadrant, gained high marks from customers for its data integration tools' ease of use, its built-in transformation functionality, and the range of available integration adapters for various SAP applications.
Friedman said, however, that SAP struggles with its customer support and services business. "Functionally and vision-wise, they're doing very well," he said of SAP. "Execution-wise they're struggling a bit."
Other vendors in the rankings were Microsoft, the lone challenger; iWay Software, Pervasive Software and Sybase in the visionaries' quadrant; and Syncsort, Pitney Bowes Business Insight, Open Text and ETI.
Buying advice for data integration software
Companies evaluating data integration vendors should first and foremost match the vendors to their specific data integration requirements, according to Friedman. While many vendors support multiple data integration styles, not all are created equal. Some are stronger in ETL to support business intelligence (BI) systems, for example, while others excel at data virtualization across data sources.
Potential data integration buyers, especially those considering niche and visionary vendors, must also weigh the vendor's sustaining power, Friedman wrote.
"IT leaders focusing on data integration initiatives must also consider non-product issues, such as vendor viability given economic conditions, the depth of partnerships, the availability of skills, and the degree of satisfaction with service and support as perceived by the existing customer base," the report states.