Q&A With Informatica CEO Sohaib Abbasi - InformationWeek

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Q&A With Informatica CEO Sohaib Abbasi

The head of the data integration tool provider talks about competition, software industry consolidation, and Informatica as an acquisition target.

A number of tech vendors in recent months have talked about the various ways they're helping business customers manage fast-growing mountains of digital data.

Informatica, as the leading independent provider of data integration tools, is among a handful that excels at this claim. Informatica just finished one of its best fiscal years ever, growing revenue by 21% in 2007 to $391.3 million, even as it faces increasing competition from IBM's ambitious Information On Demand strategy.

InformationWeek editor-at-large Mary Hayes Weier caught up with Informatica CEO Sohaib Abbasi on Feb. 1, to learn his views on the competition, software industry consolidation, and the occasional chatter about Informatica as an acquisition target.

InformationWeek: How well is data integration understood among large companies?

Abbasi: It is early days in the data integration market. The majority of the deals [we get] in any given quarter remain uncontested by any commercial vendor. Our success comes primarily by convincing customers to buy our software instead of building it in house. That's no different from any other category; where business apps were 30 years ago or relational databases 25 years ago. The value, of course, is reduction in costs. It's not as labor intensive [to buy a commercial solution].

InformationWeek: IBM has gotten more aggressive about this space, particularly since acquiring Ascential Software for $1.1 billion in 2005. Is IBM your top competitor?

Abbasi: We see IBM more frequently [in competition for deals] than any other commercial vendor. Fifteen percent to 20% of any deals in any quarter we will compete with IBM. We win 70 to 80% of deals we go against them. The reason is two-fold. First, our neutrality: we partner with all the leaders in business intelligence, databases, and applications. We have no hidden agenda of promoting one database over another or one app over another. The other reason we continue to win the vast majority of deals against IBM is our relentless pace of innovation. Informatica has delivered new product capability every quarter for the last 12 quarters. In order for companies to gain an advantage they need to leverage all of their data; not just relational data but near universal access. The volume of data increases 50% each year, but IT budgets don't increase 50% each year. We support the latest in grid technology and commodity hardware to enable cost-efficient scalability.

InformationWeek: Informatica often comes up as a potential acquisition target. Do you see an acquisition or merger in your future?

Abbasi: We have been singularly focused on our execution. Our management team is very much focused on ensuring we deliver the best value to our customers, employees, and shareholders. We would not have achieved record results had we not been singularly focused. We are well aware that segments of our industry are consolidating at a higher pace than younger segments. I expect there will be a lot more consolidation in mature segments where the only growth strategy is acquisition. We are in an early stage market. We have a near perfect innovation record, having delivered new functionality in 12 quarters. Having said all that, our board has a fiduciary responsibility to consider all the strategic opportunities available to Informatica.

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