Five years ago, data firm Informatica set out with a vision that has now enabled it to break through the recession. CEO Sohaib Abbasi explains the importance of Cloud Computing and master data management when it comes to data integration - and why it's considered the Switzerland of the software industry.

“Five years ago, recognising the promising value of information asset marked within IT systems, we articulated our vision of data integration within the enterprise and beyond the enterprise,” says Sohaib Abbasi, CEO of Informatica. “To realise this value, data must be integrated in on-premise applications as well as off-premise sources, managed by outsourcing service providers such as business processing outsourcing and Cloud Computing vendors.”

Five years on, Abbasi reckons that this vision is enabling Informatica to maintain an upbeat outlook despite the current economic downturn “As observed by some economists, the impact of the economic recession now varies by geographic regions. Across all major geographic regions, the prevailing macro-economic outlook continues to shape the primary business strategies of our customers,” he says, adding: “We believe in certain segments over the last several quarters, customers have been reluctant to make commitments for projects that were multi-quarter in duration and now, once again, they are preparing for the economic recovery. And that [has been] reflected in significantly larger number of million dollar deals.”

This situation is, he argues, being helped by the breadth of market opportunity that Informatica can address. “Our addressable market is no longer limited to a single discretionary IT budget item for data warehousing projects, but encompasses many business critical IT budget items for broader data integration projects,” he explains.  “Representing this growing trend in Q2, 55% of our deals over $100,000 were with the customers that plan to use Informatica for more than data warehousing. In addition, in Q2 more than 78% of our professional services fees were from consulting engagements beyond traditional data warehousing, including data migration and mass data management projects.

“We continue to benefit from growing customer adoption of the latest innovations, within our broadest ever product portfolio that includes five infrastructure software categories, enterprise data integration, data quality, B2B data exchange, application information lifecycle management and Cloud Computing data integration.”

Growth opportunities

This presents some solid growth opportunities, he argues. “There clearly is growing interest in master data management and it may be one of the highest growth data integration project types for the first half of this year,” he says. “Our customers are looking to make the most of the investments they've made across its various specific applications. And one way that they have identified that they can get a lot more value is by having a master data management solution; a data hub.

“The traditional strength of Informatica positions us extremely well in that market. We have now universal connectivity to all the sources of data - more sources than anyone else in the industry could support. We also provide data quality products that are differentiated with identity resolution, having a data quality that works across all data types. And we provide extreme scalability to be able to move data into that master hub and then use it as a reference data to synchronise with all the other data sources as well.”

Some more traditional markets have slowed down however. “I believe that in this macro-economic environment, customers are reluctant to rollout major ERP [enterprise resource planning] implementations,” admits Abbasi. “We are really not banking on essentially a significant uptick of any new ERP applications or significant change in the implementation phase of the ERP applications, but rather leveraging all of the data that exist in the form of mass data management projects and other such initiatives.

“Our customers are continuing to be refocused on their business survival strategies, particularly in Europe, and on gaining more operational efficiencies. In the case of Americas, the customer initiatives are ensuring that they focus under their most profitable customers, that they focus on ensuring that they can increase revenue and do so in a relatively short period of time. Many of them are banking on ensuring that they are among the first to benefit from economic recovery.”

Cloud-based integration

But for all that, there is still work to be done and Abbasi cites key customer wins as examples of IT investment in practice, including a large global bank and a leading energy company in the Americas, and a private banking data warehouse project with financial services firm Credit Suisse in Europe.

Informatica is also seeing a need for Cloud-based data integration coming through. For example, in Asia Pacific, Japan Post Office Network selected Informatica as its Cloud Computing data integration standard. "Japan Post expects to reduce the cost for data migration from legacy applications and. more importantly, to retain control over the data managed by the Force.com Cloud Computing platform.”

This Cloud Computing push is being supported by the introduction of a new product, PowerCenter Cloud Edition, and a new complementary Informatica On Demand offering called  PowerCenter Service. “With PowerCenter Cloud Edition, IT Departments can deploy PowerCenter on Amazon EC2 web services infrastructure to integrate data managed by Amazon EC2, other Cloud Computing vendors and even on-premise applications,” explained Abbasi.  “And with the complementary Informatica On Demand PowerCenter Service, IT departments can productively managed their PowerCenter Cloud Edition based data integration jobs, running remotely on Amazon EC2, simply by using in its net browser.

“With the flexibility of deploying PowerCenter on-premise or on Amazon EC2, IT departments can optimize for both performance and network cost by running PowerCenter near the primary data sources. At the same time, IT departments can be optimised for hardware, software and labour costs, by selectively using the economical Cloud Computing model.”

Switzerland of the software industry

Later this year, version 9 of Informatica's flagship offering will be released to selected customers, with a  full release early next year. Abbasi argues that this release will add value for customers in three key areas:  IT business collaboration, pervasive data quality and innovative service orientated architecture (SOA)- based data services. “Simple-to-use analyst tools designed for business users will enhance IT business collaboration,” he says. “Pervasive data quality services will improve the trustworthiness of all data throughout the data integration process. Open SOA-based data services will enable even more types of operational data integration projects including data virtualisation.”

As one of the last standing independent data integration vendors, Informatica will continue to pursue its role as the 'Switzerland of the software industry'. “Informatica does not have any hidden agendas to promote one database over another; one middleware stack over another; one business intelligence offering over another, or one business application suite over another,” says Abbasi. “In fact, our neutrality is the best insurance against the uncertainty of industry consolidations. Our customers are assured that they are not locked into a single vendor and, more importantly, are not locked out of this single most valued IT asset: their data.”

While independence and neutrality clearly remain the goals, there is always the long shadow of aggressive competitors such as Oracle, which has beefed up its data integration functionality with its takeover of GoldenGate.  But Abbasi remains phlegmatic about Oracle and suggests that in fact other vendors might be more at risk. “We have a very strong partnership that over the last five years has been further strengthened, and I expect that we will continue to partner very strongly with Oracle,” he says.

“The competitive landscape has not changed much over the years. We compete with Oracle in less than 5% percent of our deals and, at the same time, we value our partnership with them. Oracle continues to rely on Informatica as part of Oracle Business Intelligence Enterprise Edition, as part of Hyperion, as part of Memphis, and a number of other environments.

"The interesting question would be: could Teradata rely on Oracle to help promote Teradata's dual active data warehouse over Oracle's own flagship of database product? With our neutrality, customers would not have any such questions.”