Posted by Rob Karel on December 26, 2007
by Rob Karel.
As 2007 comes to a close, I've decided to take a step back to reflect on what's happening within master data management (MDM). In early 2007, I published a market forecast for master data management that highlighted a $344M total MDM software market size (not including services) in 2006 with anticipated growth to over $2.2B by 2010. In this research, I also predicted the following:
- A single technology solutions for cross-data-domain MDM would be 18-24 months away (translates to mid-2008 at the earliest).
- Data management vendors of all shapes and sizes would try to convince their customers that they offer MDM solutions, further confusing an already complex market.
- There would be new large MDM players entering the market to challenge IBM, Oracle, and SAP.
From a technology perspective I have seen positive momentum towards multi-data-domain operational MDM solutions, especially from vendors such as IBM, Initiate Systems, Oracle and Siperian. That being said, in 2008, IBM and Siperian will appear to be "first to market" with these multi-domain offerings (Siperian's MDM Hub was available in early 2007 and IBM's MDM Server available early 2008). Of course, both of these vendors will need to continue to demonstrate significant 'in production' customer success stories to validate their approaches and architectures. Also none of these vendors have effectively figured out how to converge the process and workflow-heavy functionality required to support traditional product information management (PIM) solutions and I believe that will be the Achilles heel of most of these vendors (I believe IBM would agree with me regarding this challenge, which is why its MDM Server is complementing — and not replacing — IBM's WebSphere Product Center for its first release).
Unfortunately, I was more right than I even imagined when it came to vendors jumping on the MDM bandwagon. I have seen or heard MDM marketing from vendors specializing in data integration, business intelligence, data quality, data profiling, data warehousing, and enterprise search, as just a few examples. Certainly many (but not all) of these vendors can provide minor or even major functionality of value to an MDM ecosystem, but none provide the implied comprehensive MDM solution. It's almost as if these vendors believe that if they don't have MDM listed somewhere on their marketing collateral they will go out of business. Who knows, maybe they're right — but it certainly doesn't help information managers and enterprise architects trying to build their MDM strategy to decipher the market.
Regarding my prediction that a new major MDM player would enter the market, I'd have to say I've so far been proven wrong. Yes, Microsoft did acquire Stratature — but that was more of a BI-centric analytical MDM investment and doesn't qualify Microsoft as an operational MDM solution provider. More recently D&B acquired Purisma, which is certainly an interesting turn of events where one of the world’s largest providers of B2B data firmly enters the MDM software application market. But don't expect D&B to steal significant MDM market share from IBM, Oracle, or SAP — especially since Purisma primarily specialized in customer data. If anything, one can argue that SAP is losing relevance as a major enterprise MDM solution since its focus still seems to be on mastering only data within SAP environments with less focus on the more challenging heterogeneous environments facing most MDM challenges. But stay tuned in 2008, I still expect the major players to be challenged with HP high on my list of potential entrants. Also, don't count SAP out too soon — with its acquisition of Business Objects we may see some renewed energy and investment into its MDM products.
While all of the product development, marketing, and M&A activity coming from the MDM vendors is interesting and entertaining, the most valuable and insightful information about the evolution of the MDM market comes from the Forrester customers I speak to every day. Unlike my coverage of more mature data integration technologies like ETL where vendor selection is the most common question asked, I rarely field questions about MDM vendor selection. Regarding MDM, these customers are more concerned about data governance, organizational readiness, architectural strategy, business case development, prioritization, and the biggie — do we really need to worry about MDM? If so, why?
What does it all mean? I'm happy to report that it means you are asking the right questions at the right time. Many MDM technology alternatives will be there for you once you're ready — the MDM vendors are making sure of that — but first be sure your organization is prepared to deal with the cross-functional and technical complexities of adopting a master data management strategy. Let's see what happens in 2008!