Interview: Sohaib Abbasi, CEO Informaticaby
Are the days of the independent business intelligence vendor numbered? Whilst recent market activity would suggest so, Informatica CEO Sohaib Abbasi tells Stuart Lauchlan that there is both room and a need for a vendor-neutral player in the game.
With IBM buying out Cognos, Oracle snapping up Hyperion and Business Objects becoming part of the SAP empire, the days of the independent business intelligence vendor might seem to be numbered - a theory made even more compelling by SPSS decision to sell out to IBM.
But Informatica CEO Sohaib Abbasi is adamant that there is both room and a need for a vendor-neutral player in the game. Informatica has always played up its role as Switzerland on the software industry map, pitching its vendor neutrality as a major selling point.
But with events such as Oracle's acquisition of Sun and Informatica's owned beefed-up relationship with Hewlett-Packard, is this neutral stance something that can be expected to last in the long-term?
“As far as Oracle and Sun are concerned, it's business as usual,” insists Abbasi. “We have very strong partnerships with both of them. We tend to find that when two of our partners merge, it just strengthens our mutual relationships. As for HP, we have recently had discussions with them to elevate our relationship to a more strategic level. There have been some new developments within HP that allows them to have stronger partnerships. It's not that different to partnerships that we have with some other companies. For example, Oracle also embeds our technology and sells it as part of their offering, as do SAP and Microsoft. Our neutrality allows us to be considered the most trusted partner.”
Greater connectivity and flexibility?
But Abbasi has previously cited SPSS as an example of another company who could claim neutrality and independence; SPSS is now the subject of a takeover by IBM. Is there room for the independent software vendor in today's consolidating market?
“Well, Google, Oracle and Microsoft are all independent,” chuckles Abbasi. “As for SPSS, that's one of the many companies that have not fared as well as us. Our results have been strikingly different to theirs. For the past four fiscal years we have double our revenues. Even in a recession, we grew revenues and operating income so any comparison with other companies is not particularly instructive.
“We are also not limited to the business intelligence (BI) type of application. We are used in operational data integration. Almost half of all our new deals are with companies who are using it for more than data warehousing and for stuff beyond BI. I don't believe that any other vendor would be able to claim that they can answer all the questions that customers might ask, but broadly speaking that's what BI should be about. It's not just about being able to answer certain anticipated questions or certain types of analysis that you know you want to do. Analysis can range from pre-determined though to ad hoc.
“There is a need for independent vendors. Your requirements can end up spanning multiple data sources, they're probably not going be just about getting data from your Oracle database. You may need to get data out of bespoke applications and none of the big applications vendors would be able to help there. One could argue that independent vendors can provide greater connectivity and flexibility.”
An end to recessionary spending?
“We are seeing an end to the recessionary spending,” argues Abbasi. “A year ago with customers, the converasation we were having with customers was about business survival; now it's about business revival! The only IT budgets being funded a year ago were for projects based around cost containment or driven by regulatory requirements. But more and more we're seeing firms, especially in the financial services sector, embarking on new project to help to benefit from recovery.
“For example, I know of one financial services firm that is embarking on an initiative to consolidate all of its customer-related data into a hub so that it can identify who the most profitable ones are. Now, such a project just wouldn't have gotten funding a year ago. We're seeing more improvement in the US among other verticals as well, while there are some early signs of improvement in certain geographies in Europe, for example among financial services firms in the UK or among manufacturing firms in Germany.”
But are spending patterns returning to the way they were or have tough lessons been learned from the recession? “I think it's too early to tell,” says Abbasi. “We can all learn from the experiences that we've been through. We have seen the discipline to do more with less and the discipline to manage risk. I think most CEOs realise that the reason they haven't been spending as much was because they didn't believe that they had much growth prospect. If they continue to believe that they shouldn't be spending, then I'd say they don't believe in their own growth prospects. We went into the recession with customers who had adapted in terms of becoming more efficient and gaining an advantage, in some cases a very strategic advantage.
“Our view at Informatica is that data matters even more in uncertain times and even though the outlook has improved for the better, there is still a great amount of uncertainty around. Some of that is macro-economic – what shape will the recovery take and what impact with the public sector stimulus money have. For that reason, organisations need to prioritise their IT spending on the thing that IT can best deliver, which is timely, holistic and accurate data. What organisations need more then ever is the ability to be agile and responsive and the only way to do that is to have access to trustworthy data. Any technology that provides access to that trustworthy data needs to be prioritised. It's interesting that Gartner's research cites data integration as a category in infrastructure software that will grow faster than any other.”
So overall, the 'Switzerland' strategy remains intact? “Our strategy has worked extremely well for us in the first half of this year despite being in the middle of the worst recession in a generation,” concludes Abbasi. “There's a lot of evidence that we have a sound strategy and our team has demonstrated exceptional operational discipline. We are seeing improvements in the macro-economic environment and there's tremendous room for us to grow.”
Sohaib Abbasi talks about Informatica's Cloud Computing strategy on our sister site BusinessCloud9.