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Informatica expands horizons

Madan Sheina

Informatica expands horizons

Last week, acquisition target Informatica turned acquirer after it purchased Applimation for $40 million. So what does information lifecycle management (ILM) have to do with data integration, and will Informatica fare better than the last time it tried to broaden out from its core market?

The hunted turned hunter targets union of ILM and data integration

As one of the few remaining independent data integration vendors left in the market, Informatica has been widely tipped as an acquisition target. While boardroom economics might dictate if and when that might happen, Informatica has continued to sharpen its focus on its core data integration business with a string of acquisitions - Identity Systems, Itemfield, Similarity Systems and Striva.

However, the acquisition of Chicago-based Applimation is very different. It's an attempt to move into adjacent growth markets. Informatica clearly believes that ILM, which refers to a policy-based storage management strategy that requires data to be assigned to a particular category according to criteria such as access rules or regulatory or legal retention requirements, will expand its “addressable” market.

This move is as much an opportunity to cross- and up-sell data integration into ILM environments (and vice versa) as it is an enhancement to Informatica's PowerCenter platform. Applimation has around 300 customers, of which a third are believed to be Informatica customers. Informatica claims these companies would like a single platform for data movement and integration. The merger promises just that - a beginning to end environment for smartly integrating, managing, moving migrating and archiving application data throughout a lifecycle from creation to provisioning, archiving and retirement.

Data integration technology, specifically migration, plays a key role in ILM, ensuring consistency across active and inactive archived data. The latter can needlessly consume expensive storage capacity. ILM can help by making sure that infrequently accessed data isn't needlessly being stored on high-priced storage platforms and that companies are meeting their regulatory requirements for data retention and accessibility. In particular, many Informatica customers can also benefit from the application of ILM concepts to migration and enterprise data warehousing projects in order to improve performance by pinpointing and eliminating dormant data.

There was no real integration between the Informatica and Applimation environment prior to this announcement. Some work will need to be done on that front. So far Informatica hasn't detailed any integration roadmap, but it has demonstrated a knack for tight product integration after its past acquisitions.

Although demand ILM is high, sales will once again prove a challenge

This isn't the first time that Informatica has attempted to step outside its core market. In 2001 it launched into the packaged analytics applications market after buying Influence Software. Two years later it handed it over to systems integrators after failing to sell the product - it was unable to provide the deeper domain expertise and customization services that customers expected.

So will its foray into ILM fare any better? Even though ILM is a mature market, demand for such software runs high, particularly as storage capacity continues to rise (driven by growth in unstructured data volumes) and as companies come under increased economic and regulatory pressures. They will need to be smarter in maximizing existing storage resources and strategies to minimize additional purchase of expensive capacity.

Informatica will have to overcome similar sales challenges to those that plagued its previous analytic applications romp. While both companies still sell into IT, an Applimation buyer is very different to the type of person that buys data integration. That could prove to be another uphill battle for Informatica. Remember that the sales issues that dogged Informatica's failed analytic applications strategy had more to do with the product (i.e. an application) than its sales force.

ILM is less predictable than a move by Informatica to pick up one of the remaining best-of-breed master data management (MDM) vendors. Speculation continues that Informatica is preparing to make a swoop for MDM specialist Initiate Systems, which is also based in Chicago. However, an expansion into ILM will make Informatica more attractive to database vendors like Oracle - widely tipped as a buyer. Oracle only has a basic ILM tool, which has been freely available to its database customers since early 2007, while Applimation's ILM system incorporates metadata specific to Oracle's E-Business Suite.

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