Is Informatica Losing Relevance?

Informatica was recently named among "The Dozen" most influential companies driving the intelligent enterprise in our just-published 2008 Editors' Choice Awards. As a contributor to the nominations, I too had recommended Informatica. Why, then, this apparent volte-face, and why does it matter to you? Very simple: I believe Informatica is at perhaps the most important crossroads in its recent history, and as a current or potential Informatica customer, you too are invested in Informatica's future.By all measures, Informatica is a leader: It is placed in the Leaders quadrant by Gartner in their Magic Quadrant for Data Integration Tools and also in the Magic Quadrant for Data Quality Tools, and placed in the Leaders category in the Forrester Wave for Enterprise ETL. The company is one of the last large independent vendors in data management, has a strong product line, excellent brand recognition based on a hard-earned reputation, and a management team that has proven its mettle.

Yet, Informatica now seems twice as vulnerable to the Formidable Four: IBM, Microsoft, Oracle and SAP. These four companies now have (more or less) comparable software tools and solutions to offer; moreover, they are far more entrenched in American corporations and IT shops in a higher-value solution space and positioned right in the face of the business (via their other solutions), whereas data integration is and will remain largely a back-office solution. Informatica is going to be hard pressed to find a Fortune 500 - or even Fortune 2000 - firm that is not already substantially invested in one or more of these four competitors, and I suspect that the quest for growth and market share will be an uphill climb for Informatica in the near future.

Fortunately, there are many options for Informatica. For example, HP, with its Neoview platform and armed with expertise from the Knightsbridge acquisition, is well placed to invest meaningfully in (and get the most mileage from) Informatica. Or, companies like CA and Oracle may joyfully lap up Informatica. Oracle and Informatica are old buddies in the server room; there are probably more Informatica ETL installations with Oracle databases than all other databases put together.

Informatica could also align with complementary vendors like Teradata and SAS, although for any such alignment to be meaningful, Informatica will need to go beyond standard (often meaningless) marketing alliances, and forge a proposition that grabs the attention of customers. Lastly, Informatica could choose to go it alone, with the objective of emerging as a bigger and stronger competitor in the data management space. Informatica appears to have strong financials, and has great pedigree - finding investors to support ambitious growth plans should not be difficult. Informatica has enough momentum built up over the past few years to carry it through 2008 (hence my recommendation [along with that of other contributors] for the Editors' Choice Award), but it is at risk of becoming marginalized (hence the provocative headline). This risk is, in turn, shared by customers that depend on Informatica products to feed their mission-critical analytical and decision support solutions. 2008 is a critical year for Informatica, and for its customers.

How will Informatica - and your Informatica-dependent data integration framework - fare in 2008 and beyond? The time to begin thinking about this is now, not (as they say in New York City subways) when it's on the news.Informatica was recently named among "The Dozen" most influential companies driving the intelligent enterprise in our just-published 2008 Editors' Choice Awards. As a contributor to the nominations, I too had recommended Informatica. Why, then, this apparent about-face, and why does it matter to you?