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The Way Business Is Moving

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Issue Date: March 2008

Q&A: Informatica CEO on data quality, MDM

13 March 2008
Jason Stamper

Sohaib Abbasi is chairman and CEO of Informatica, a data integration and quality company. With latest quarterly results seeing sales growth of 24% to $114m, Abbasi has obviously been doing something right since he took the reins in July 2004. Here he talks about the firm's growth prospects, the rise of data quality and the hype surrounding master data management (MDM).
Q. Before you joined, the company had hit a rough patch which I believe has been partly been put down to being over-diversified.
A. Yes, the company had gone into analytical applications. They had been inspired to pursue this somewhat different market segment.
Revenue had been pretty flat for four years and there was some concern that the integration market was saturated, so it tried to get into analytical applications instead.
But it was clear to me when I joined that that was a formidable challenge. So I took the decision to refocus on our core. I challenged the assumption that our core market was not going to see growth.
Q. What gave you the confidence to exit analytic applications - which the company had really bet the business on - and go back to data integration?
A. We knew that our technology was being used for things for which it was not initially designed. So in many senses we were seeing the early stages of a market but with a mature product. The Informatica [integration] technology was already tried and tested for data warehousing, but now it was evolving in the ways it was being used. IDC said at the time spend on data warehousing would be in the region of $2bn but incremental new projects, involving integration and so on, would be in the region of $11bn.
Q. Your latest quarter and indeed annual results have seen good growth. You are confident, I assume, that you can continue to find growth in the integration space, where certain rivals have floundered?
A. Yes I believe we have three pillars of growth. There is the broader use of our technology, and we started to see immediate results of that when refocused in that area.
The second is expansion beyond our primary market (North America).
Around 70% of our sales are still in North America and that should be more like 50% or even lower. We have strengthened our team in Europe, opened offices in Asia Pacific, such as Japan, Australia, Singapore, India and so on. That will take a little longer, but our financial 2007 already benefited from that - our international growth is much faster than our US revenue growth.
Thirdly we believe we can automate more of the data integration lifecycle. But there is no reason to question our strategy: our results speak for themselves. What we have to do now is maintain operational discipline.
A survey of our major customers found that they value data as the most valuable asset after people, but acknowledge they are not using it effectively. Why is there that gap? It is down to accessibility, timeliness and accuracy of data: and those are the three things that we do.
Q. Can you be a little more specific about the challenges you believe your technology can help to address?
A. Yes, there are four key areas for us. Enterprise data integration, which includes the integration of structured as well as unstructured integration.
Q. Is that why enterprise search firm FAST Search and Transfer is an OEM customer?
A. Yes, they use our technology to increase the reach of their search technology to all other data sources. The second thing we have is an on-demand product, because data fragmentation is no longer restricted to on-premise data. We supply our technology to on-demand providers - companies like NetSuite and salesforce.com are partners - but we ourselves also offer an on-demand data integration services.
The third thing is for B2B data exchanges, such as RosettaNet, SWIFT etcetera. Trading partners do not always implement the standards exactly the same so we make it flexible enough to enable B2B data exchange without specialist programming.
And the last area is data quality. We are the fastest growing company in data quality - we are more than doubling our data quality business each quarter.
Q. Why do you think so many companies only think about data quality on a tactical basis?
A. I think things are improving. Certainly we position data quality as key to all data integration projects. If you are making decisions based on data you need to be sure that the data is accurate. Most organisations take the opportunity to optimise the quality of their data when introducing new applications.
Q. There is a lot of hype around master data management (MDM) right now, but I am not sure technology alone can solve the whole 'single version of the truth' issue.
A. I agree, MDM has promised a lot but it may not necessarily deliver. The applications vendors are positioning customer hubs or citizen hubs as out-of-the-box solutions but the nature of a hub is that it is a single place where all data is collected and propagated back to source systems. No one is going to replace all their source systems so at best a hub is a system of record or of reference. Our role is to provide the enabling technology.
For Virgin Media, for example, they wanted to gain synergies from the merger of two companies and while the consolidation of billing systems is the ultimate goal, it is not a very practical first step. So we helped them synchronise data between those disparate systems while they work towards a consolidated system.
Q. You recently launched Informatica Release 8.5. What are the key enhancements?
A. The biggest things are better support for realtime data integration, and lots more capabilities aimed at integration competency centres [ICCs] and enterprise-wide use generally.
Abbasi joined Informatica as CEO in July 2004. Prior to Informatica, he spent 20 years at Oracle where he was most recently a member of Oracle's executive committee and SVP of two major divisions, Oracle Tools and Oracle Education. Abbasi joined Oracle in 1982 when it was a 30-person startup. He is said to have envisioned and launched the Oracle Tools business, which he grew from zero to $3,75bn in cumulative license revenues.


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