Oracle Finally Takes Control Of Its Data Quality Destiny With Acquisition Of Silver Creek Systems For Product Lifecycle Support

By Rob Karel and Roy Wildeman

On January 4, 2010, Oracle announced its acquisition of Silver Creek Systems, a small private software company focusing on product data quality, which Oracle plans to add to its Oracle Data Integration offering.   In our recent research, “It’s Time To Revisit Product Information Management”, we discussed how Forrester believes Silver Creek holds a virtual monopoly in delivering advanced product data quality capabilities, unmatched by other customer data-centric data quality vendors in the market.    Due to this, many MDM, PIM and data quality software vendors, including Oracle, had relied on Silver Creek as a strategic partner to add credibility in product data quality.   And as we accurately predicted in that research, Silver Creek has now been acquired which will introduce a significant challenge to these partners.

So what makes Silver Creek so unique in the data quality world?   While customer data quality is certainly not an easy task, that software market and competency is fairly mature with many vendors offering preconfigured rules engines, reference libraries and out of the box workflows to support the cleansing, standardization, enrichment, matching and merging of name, address, phone number and other personally identifiable information.    Customer data quality, for the most part, targets a fairly small number of conventional attributes when compared to the near infinite number of varying, often specialized attributes that can be used to describe the physical sizes, dimensions, shapes, weights, colors, features, functionalities, and other parameters that are used to define a product, material or even a service.   Silver Creek is the only data quality vendor at this point that we feel has sufficiently addressed the unique and complex challenges associated with product data quality. 

This acquisition represents a number of benefits for Oracle’s customers.  The most immediate is for the Oracle Product Hub PIM solution, which previously offered an OEM of Silver Creek packaged as Oracle Product Data Quality Server.  The acquisition will allow for even more seamless integration between the PIM product and the product data quality software.  But product data doesn’t only flow through a PIM application.  Expect Oracle to leverage these product DQ capabilities across its enterprise apps (E-Business Suite, Retail solutions, etc), business intelligence, data warehousing, performance management, and other products that capture, maintain, deliver, or consume product information. Most notably, Oracle has also been buying up best-of-breed Product Lifecycle Management (PLM) players over the last two years, including Agile PLM (leading player for high-tech companies), a buy which also included the Prodika offering (leading PLM app in food & beverage), and most recently Conformia (a pharmaceutical PLM pure play). Since all three of these industry buys cater to manufacturers facing strong auditing & regulatory requirements, look for Oracle to also leverage Silver Creek’s data quality technology to help these PLM customers further ensure that all their legacy product data is harmonized and in full compliance.

We’ve been critical of Oracle’s data quality strategy in the past, because it has relied so heavily on technology and OEM partnerships to deliver data quality capabilities to its customers that it has remained at risk of external market forces to impact its ability to consistently deliver this capability.   Specifically, aside from its partnership with Silver Creek, Oracle also currently relies on partnerships with Trillium Software and Informatica to support its customer data DQ needs.   I’ve blogged in the past of Informatica’s acquisitions of Identity Systems, which Oracle uses as its core match engine for its Siebel Universal Customer Master (UCM) MDM product as well as Informatica’s acquisition of AddressDoctor, which Oracle also leverages for postal address verification, validation and enrichment.    Both of these acquisitions signal to me that Informatica is making a not so stealth move into the MDM space, which would put them in direct competition with Oracle.   We’ll see if that actually plays out, but Oracle’s acquisition of Silver Creek is an excellent indicator that Oracle has finally decided to become master of its own data quality destiny, which means we would fully expect them to also make an acquisition in the customer data quality arena in 2010.

And what about Silver Creek’s other partners like Heiler Software in the PIM space, Siperian for product MDM and Pitney Bowes Business Insight for DQ?  As of now, of course, Oracle says they plan to support all existing partners and are happy to enjoy a friendly state of co-opetition with them. But in reality these partners will have to look elsewhere to ensure the product data quality needs of their customers will continue to be met – uninterrupted.