Informatica aims to get its “Vibe” back

OVUM VIEW

Summary

Informatica, which pioneered the current data integration tooling market, is seeking to reboot growth by targeting midmarket prospects who have traditionally perceived its solutions as too complex and expensive. The technology linchpin of this strategy is “Vibe,” a service-oriented architecture to deconstruct and make Informatica’s technologies more easily embeddable into third-party tools and/or cloud-based services. This is not the first time that Informatica has promoted an OEM technology and go-to-market strategy for its products. But Vibe marks the first time that Informatica is enabling OEM partners to embed pieces of its capabilities, rather than entire Informatica products, opening the possibility of competing head-on with low-cost/no-cost rivals who have staked out the entry level of the ETL and data quality markets. Technology is only the first step; to capitalize on Vibe, Informatica must adapt its sales and go-to-market model so it can adequately profit in potentially higher-volume markets that are lower margin.

Informatica reboot 2.0

Informatica, which pioneered modern ETL with an automated metadata-driven approach, is reinventing itself for a second time. Its first reboot occurred roughly a decade ago when current CEO Sohaib Abbasi took over and redirected Informatica from an abortive foray into “analytic applications” back toward its core data integration competencies – but with a twist. Informatica expanded the footprint of the data integration market beyond its ETL and data quality roots into related areas such as master data management, data replication, data archiving, B2B integration, ultra messaging, event processing, and data services. The net result was over 30 consecutive quarters of year-over-year growth that continued even through the heart of the 2008–09 recession.

But growth stalled last year. Informatica’s market has grown more crowded, with IBM with its own broad suite at the high end, and niche providers at the entry level. Now, “co-opetition” is emerging among database and application partners as SAP, Oracle, and even SAS promote data integration as extensions of their data, enterprise application, or analytic platforms.

Looking beyond the Global 2000

Although Informatica’s enterprise market might not be saturated, it is certainly more mature than the low end, where midsized enterprises are taking advantage of the cloud to automate more of their business. This is the market where Informatica is aiming to broaden its footprint. At its analyst conference earlier this year, the company showed some prototypes for new market messaging that took a more generic angle, showcasing how data integration makes the economy move, as opposed to an IT-oriented message about the power of Informatica’s product technologies.

Vibe – the technology underpinning

Vibe is the technology strategy which Informatica hopes will reinvigorate its market. Vibe provides a lighter-weight approach to getting Informatica’s capabilities to become ubiquitous among OEMs, while providing a lower-cost onramp to its technologies.

Instead of requiring OEMs or end users to buy entire Informatica tools, such as PowerCenter or Data Quality, Vibe deconstructs those tools to abstract out specific functionality that is packaged as modular, lighter-weight, embeddable services. Informatica terms this a “virtual data machine.” On initial release, this virtual machine will include:

  • transformation libraries, which are in effect, the recipes for converting data from one form to another;
  • an optimizer or compiler;
  • a runtime engine that executes the transform; and
  • connectors (e.g., adapters) to data sources.

With Vibe, Informatica customers or OEMs can just consume the necessary capabilities for integration and transformation of data between the data source(s) and data target(s) of choice.

Informatica has adapted the old Java phrase, “Write once, run anywhere,” to state “Map once, deploy anywhere”(and it has trademarked the phrase). If this sounds familiar, you have a good memory. The idea of virtualizing components to run only the essentials harks back to the days when vendors were using OSGi to componentize and miniaturize their Java middleware. The resemblance to Java strategy is more than coincidence; Informatica’s recently appointed vice president of marketing, Marge Breya, previously acted in similar capacities at Sun and BEA.

Admittedly, Informatica is not planning to put all of its capabilities through Vibe; for instance, Master Data Management, which resembles more of a vertical industry application, would be too complex for such an approach – although data connectivity aspects are leveraging Vibe. Instead, with Vibe, Informatica is focusing on selling the basics, comprising data integration (bringing the data together); data quality (sifting through it); and information lifecycle (when to deprecate cold or aging data while retaining metadata regarding its interrelationships and permissions).

The go-to-market side of the coin

While Informatica is best known for direct selling to large enterprises, it already has stakes in the ground regarding alternate delivery channels including an OEM program, a public cloud, and an online marketplace.

Its existing OEM program already counts roughly a hundred members, who embed full-blown Informatica products into their solutions. Vibe provides another OEM path that doesn’t require embedding the full tool – with obvious ramifications for pricing.

Informatica has also successfully drawn in new customers to the Informatica cloud, where most of the subscriptions are from new customers. And then there is Informatica’s two-year-old Marketplace, which was created as a simpler alternative to third-party add-on OEM solutions. We were originally measured in our appraisal of Marketplace’s prospects – but it has managed to draw a user community in the six figures, demonstrating that an audience is there for “apps”-style data integration solutions. The Vibe technology provides Informatica an opportunity to add a new dimension to Marketplace: beyond being a place for third parties to sell their add-ons, it is a venue for Informatica to sell Vibe components directly online to end customers and new OEMs alike.

Can Informatica make the numbers add up?

Will business from the large masses of enterprises beyond the Global 2000 get Informatica to its stretch goals of doubling or tripling sales while still maintaining acceptable overall margins? These challenges are hardly unique – any enterprise software provider transitioning to the cloud faces similar issues. But Informatica must prove it can rekindle the growth.

It must execute along multiple axes and iron out the kinks in sales execution. More importantly, it must be able to penetrate deeper into its Global 2000 base, and yes, it needs to broaden out to the midmarket. It also needs to make Vibe an onramp to solutions, such as Master Data Management or Information Lifecycle Management, even if those solutions do not use the same architecture. Vibe is one of the important steps to Informatica regaining its vibe.

APPENDIX

Author

Tony Baer, Principal Analyst, Software – Enterprise Solutions

tony.baer@ovum.com

Further reading

Informatica Cloud, IT016-001489 (January 2013)

“Informatica MDM strategy evolves vertically,” IT014-002711 (March 2013)

“Informatica flexes data integration muscle in Redshift,” IT014-002706 (March 2013)

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