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Customer-Data Hubs Inch Ahead

Competition heats up among Oracle, SAP, and Siebel Systems in the growing market to tie customer data together
Achieving a well-rounded view of customers is the next challenge in enterprise-data management. It's needed in call centers to field customer inquiries, as well as in sales and throughout the business for a smooth-running organization.

"The problem we've traditionally had is that every application duplicated [customer data] and none of them tied it together," says Larry Quinlan, CIO of professional-services firm Deloitte & Touche USA LLP.

Tying together customer data is a new focus in the competition among customer-relationship-management and enterprise-resource-management application vendors Siebel Systems, which was first to market in 2003 with its Universal Customer Master; SAP, with its Master Data Management; and Oracle, with its Oracle Customer Data Hub.

Competition among them likely will intensify given the customer-data-integration market's prospects. The market generated $340 million in revenue last year and is expected to produce $460 million this year, according to the CDI Institute, a new market-research group. Customer-data integration will grow into a $1 billion market by 2009, CDI says.

The effectiveness of a vendor's software for customer-data integration may influence a business' follow-up purchases of standard applications for ERP and CRM, since integrating data is becoming so important to large companies, says Aaron Zornes, chief research officer of the institute.

Quinlan believes leadership in the field is still an open question. The application vendors' data hubs "need to mature," he says. Until they do, Deloitte & Touche is building its own customer-data-integration software.

Data hubs, or customer-data repositories, are different from data warehouses, which store historical data for analysis. Data hubs pull together customer data from many different applications--including other vendors'--and make it available for real-time operational systems. The call-center representative may want to know whether the customer on the line spent more than $1 million with the company last year. The sales representative may want to know whether the customer's order shipped on time.

The big-three application vendors may find new competition coming from venture-capital-backed startups. One of them, 4-year-old Siperian Inc., is focused on data integration for pharmaceutical companies, whose customers typically are doctors. It's a niche market that Siperian has come to dominate, Zornes says.

Other potential players are IBM, through its recent Ascential and Trigo Technologies acquisitions. Ascential can move disparate kinds of data around companies. Trigo produces a specialized data hub that pulls together product data. SAS Institute Inc. and SeeBeyond Technology Corp. may release products for customer-data integration later this year, Zornes says.

The top four customer-data hub vendors are DWL, Initiate Systems, Oracle, and Siebel Systems, says Gartner analyst John Radcliffe. "Siebel is ahead of Oracle in product functionality. Both Siebel and Oracle are ahead of SAP" productwise, he says. The talk of customer-data hubs is escalating and has helped validate the market for smaller vendors such as DWL and Initiate, he adds.

Among Oracle's CDI customers is International House of Pancakes Corp. IHOP VP of IT Patrick Piccininno says he's using the Customer Data Hub to track customer comments on 1,200 franchisee restaurants, and it's working fine.