TIBCO jumps onto MDM M&A train with acquisition of data matching vendor Netrics.

On March 25, 2010 TIBCO Software announced that they acquired Netrics, a small, private data matching vendor.    TIBCO and Netrics had a pre-existing OEM relationship that was originally announced in June 2009, where TIBCO embedded the Netrics match engine into its Collaborative Information Manager (CIM) master data management (MDM) solution.  

Netrics differentiates its advanced matching engine by describing how it “Matches data based on a mathematical model that mimics human perception of similarity, identifying hidden relationships in the data.”   The Netrics matching engine includes a self-learning capability that improves the confidence in its matches over time by also evaluating manual matches made by business users.   Netrics business and technology approach to this market made it a ripe (and obvious) acquisition target since it developed the match engine to be completely embeddable in existing applications with the vast majority of its revenue coming from OEM and SI channels. In addition to TIBCO, Netrics current MDM OEM partners also include Data Foundations and Kalido. This bodes well for TIBCO’s ability to further integrate these capabilities into its product portfolio.

TIBCO, an industry standard for its application integration and business process management capabilities, entered the MDM market with its 2005 acquisition of product information management (PIM) vendor Velosel — which it has since evolved into an MDM platform meant to support multiple data domains.  While it’s been in the MDM market for a number of years, TIBCO has been much less visible in the MDM market than its larger competitors: IBM (with its recent acquisition of Initiate Systems adding to its broad MDM portfolio), Oracle, SAP, and now Informatica, with its recent acquisition of Siperian.   

TIBCO strengths include application and process integration and business process management, all fundamental requirements for any MDM architecture, which positions TIBCO well in many MDM use cases. But TIBCO has been less credible for more traditional customer data integration (CDI) customer-data centric MDM scenarios, primarily due to its lack of embedded or integrated data quality and advanced matching capabilities.  In the past it has attempted to bridge these gaps through technology partnerships including the OEM with Netrics for matching and an integration partnership with Harte-Hank’s Trillium Software for advanced data quality management (data profiling, standardization, validation, enrichment, postal address verification, etc).  As I suggested in my blog discussing Informatica’s acquisition of Siperian, TIBCO was on a short list of vendors (that also include EMC, HP, IBM, Microsoft, Oracle, SAP, and Software AG) that were highly likely to make additional acquisitions in the MDM space.  TIBCO’s acquisition of Netrics confirms this trend where those well positioned to expand their presence or enter the MDM market will do so via acquisition.  The next step for TIBCO is to see if they are now also ready to take the next step in acquiring and embedding its own data quality software solution into its MDM portfolio.  Potential candidates may include Datactics, DataMentors, or Datanomic, among many others in the crowded DQ arena.

But what surprised me the most with this frenzy of MDM M&A activity is that Oracle has remained less active than I would have anticipated.    Ever since Informatica acquired Identity Systems in 2008, I have been wondering very publicly why they continue to rely on partners for its matching and data quality capabilities.   Oracle’s Universal Customer Master (UCM)MDM solution currently OEMs Identity Systems (now Informatica Identity Resolution) from Informatica – who as noted above has recently entered the MDM market to compete directly against Oracle – leaving Oracle highly dependent on a competitor for the heart of its UCM MDM solution.   UCM along with Oracle Customer Hub (OCH), are packaged together to account for Oracle’s customer data integration (CDI) offering. OCH uses its own match engine, but UCM is critically important to Oracle’s go to market strategy though because it is more widely adopted in non-Oracle apps environments than OCH.

Oracle made a great move in early 2010 with its acquisition of product data quality leader, Silver Creek Systems, pretty much scooping up the only credible product DQ solution on the market to complement its Oracle Product Hub PIM product, among other anticipated uses.  But it has remained relatively quiet on the customer data front, still relying on Identity Systems for matching and Trillium Software for customer data quality.  Netrics seemed the most likely target for Oracle to replace Identity Systems with its small footprint and relatively low acquisition cost, but now with Netrics off the market, Oracle should consider other matching vendors such as S3 Matching Technologies, Syslore or identity resolution/matching vendor Infoglide Software.   It’s of course possible that Oracle would consider using its own match engine from OCH in UCM, but that would be a step backwards in my opinion. And of course I’m also still expecting Oracle to follow up its Silver Creek acquisition with a customer data quality purchase of its own…but then again I’ve been wrong about that prediction for 2 years now, why change that trend now!

Comments

Oracle / netrics

Any consideration for Oracle acquisition of Tibco/Spotfire/Netrics?

Interesting question. Hadn't

Interesting question. Hadn't really considered Oracle acquiring TIBCO, and I certainly doubt they would make that acquisition for Spotfire and Netrics. They would need to be looking to significantly double down on application and process integration and BPM. Would I bet on it? No. Would I bet against it? No, not with Oracle's track record of acquiring anything that moves of late (outside the MDM space, that is). :-)