Customers can expect to see continued M&A activity and the rise of hosted services as the market continues to grow.
Posted Apr 27, 2006
DataFlux, FirstLogic, IBM, and Trillium Software are in the leaders quadrant of Gartner's "Magic Quadrant for Data Quality Tools, 2006," released Wednesday. This first-ever study is a result of the market's emergence in recent years as a "strategic initiative for organizations," according to Ted Friedman, vice president of data management and integration. Five other vendors fill the visionaries and niche providers quadrants.
Data quality is a discipline that many companies no longer need to be educated about, Friedman says. "It's become a mindset for most companies. It's no longer about educating companies as to why data quality is important, now it's about establishing best practices. Last year was a watershed year for data quality. It's reached the visibility, interest, and maturity to warrant a Magic Quadrant."
Friedman says two market trends currently influence vendors: the expansion of data quality to include other forms of data outside customer information, such as financial and product data; and the fact that data quality is an ongoing proces. Although customer data has always been and continues to be the mainstay of data quality, organizations are also cleansing and organizing financial data to comply with legislation like Sarbanes Oxley. Freidman says of the second trend: "Companies have begun to realize that data quality isn't a one-time, upfront practice, it's an ongoing procedure. Companies are monitoring data quality against business rules that fit their organization." Those companies that were listed in the visionary quadrant are recognizing this.
In the leader quadrant, IBM and DataFlux had stronger vision, while FirstLogic and Trillium Software were stronger in execution, mainly because their software isn't as capable of providing for the ongoing monitoring and maintenance of data, according to the report. Informatica and Human Inference, a European company that offers strong multilingual capabilities, landed in the visionary quadrant thanks to their focus on monitoring and maintenance, breadth of functionality (such as product and financial information), and ease of use. "Their technology is good for business users," Friedman says. "It's not as IT oriented as the others. That's important because data quality is a business issue, not an IT issue."
Group 1 Software (acquired by Pitney Bowes), Innovative Systems, and DataLever all found themselves in the niche quadrant due to their focus on customer data in certain verticals, such as Group 1 Software's focus on the financial services industry. DataLever received marks for its ease of use and low price point, according to Friedman.
Moving forward, Friedman says to keep an eye out for the acquisition of the smaller niche and visionary vendors. "Two years ago this market was made up of small, independent vendors. Now some big boys, such IBM and SAS, have bought their way into this market," he says. "While this market won't go away, some of these smaller, niche players will."
Just like the CRM market in general, customers should also look for the continued rise of hosted services. Friedman cites Salesforce.com's Diamond Data for AppExchange, a hosted data cleansing service powered by Trillium's technology. "This model will really take off."
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