Under New Management

One year after assuming the CEO job at Informatica, Sohaib Abbasi assesses where the company and the data-integration market are going.
One year after taking the helm as Informatica Corp.'s president and CEO, Sohaib Abbasi continues to fine-tune the company's market direction while at the same time expanding his vision for the potential applications for Informatica's data-integration software.

"Our singular focus is to be the dominant vendor of data-integration technologies," Abbasi says in an interview. But the laser-like focus doesn't mean Informatica is narrowing its sights. Abbasi says the company's technology is applicable to a broad range of data migration, consolidation, and synchronization tasks.

And as companies outsource more of their IT operations and business processes, the need to aggregate data from those far-flung systems has the potential to be a major growth area for Informatica, he says. "IT is getting disaggregated and data is getting fragmented. It's an interesting opportunity for Informatica."

Abbasi took the president-and CEO post at Informatica in July 2004 after holding various executive positions at Oracle over 20 years, the last being senior VP of Oracle tools and Oracle education. He replaced president and CEO Gaurav Dhillon, who stepped down earlier in the year after several years of slow growth and uneven financial results.

While Abbasi has been altering Informatica's course, Informatica was already in transition when Abbasi arrived. While Informatica's traditional business was selling its software primarily for building data warehouses, it had begun marketing its technology for broader data integration applications. And in 2003, the company abandoned its effort to expand into analytical applications, opting instead to concentrate on its infrastructure software business.

Abbasi sees four key applications for Informatica's flagship PowerCenter data-integration software: Data migration, synchronization, consolidation, and single-view of the customer. Data migration, for example, is when a company moves from one IT system to another, as Abbasi says the German army, an Informatica customer, is currently doing as part of a 10-year project to move off its mainframe-based applications to software from SAP. Informatica's software is used to transform and move data from the legacy system to the new one.

Data synchronization is when information in multiple databases must be kept in synch, while consolidation is when businesses need to aggregate data from IT systems scattered across multiple business units or geographies. And businesses like banks that have customer information "siloed" across multiple systems increasingly need tools like Informatica's to combine that data into a single-view of the customer. "We have hundreds of customers who use us for that," Abbasi says.

In the future, Abbasi says automated data integration will be critical as more business processes and IT services are outsourced to third-party companies. "The new role of IT will be to provide more control through visibility," he says. A company that outsources its human-resources management chores to one company and payroll to another, for example, will need to integrate data from those service companies to manage employee costs.

And a company that uses a hosted application from, say, Inc. and an in-house order-management system needs to integrate data from the two to gauge the effectiveness of a marketing campaign. Abbasi says the BBC is using Informatica software to integrate receivables data from a third-party service company with its revenue-management system.

Abbasi says Informatica's development road map, which will culminate in a major release of PowerCenter code-named "Hercules" in the fall of 2006, is designed to play to the three constituencies with a stake in the company's products: business users, IT managers, and developers.

Business users need access to more kinds of data. In March, Informatica inked a deal with Composite Software Inc. to sell Composite's enterprise information integration tools alongside PowerCenter for integrating historical data from data warehouses with real-time data from operational systems for business activity monitoring and other uses. And in June, Informatica struck a reseller and development deal with Itemfield Inc. that will add support for unstructured data to PowerCenter.

For IT managers who need more scalability, Abbasi says Informatica is adding support for grid-computing technologies to PowerCenter. And for developers, the vendor will make it possible to use a broader array of development environments to build applications that run with PowerCenter.

Abbasi's efforts seem to be paying off. Informatica has reported healthy sales and earnings growth for the last three quarters. Last month, the company reported that sales and license revenue both grew 21% in the second quarter ended June 30, with total sales reaching $64.2 million. Profits were up sixfold, year over year, to $7.6 million.

But the market for data-integration software is in transition. In March, IBM acquired Ascential Software Corp., Informatica's closest rival in data-integration software. While Informatica now finds itself competing directly with IBM, Abbasi accentuates the positive of the situation. His company now has more partnering opportunities with data-management software vendors and systems integrators who also find themselves in competition with IBM, he says.

Industry analysts have speculated that Informatica itself could be a takeover target by a business-intelligence or data-management software vendor that recognizes the growing importance of data integration.