A New Leader Emerges in Gartner Magic Quadrant for MDM for Customer Data

Gartner Research recently released its projection for the master data management (MDM) industry -- and it's a positive one overall, with particular growth for MDM of customer data as organizations attempt to obtain the elusive "single version of truth." The research firm's latest "Magic Quadrant for MDM for Customer Data," conducted by analyst John Radcliffe, reveals growth of about 22 percent this past year, from $302 million in 2007 to $370 million in 2008. On the other hand, according to Radcliffe, the market may be expanding, but at a rate considerably lower than the one seen in previous years, thanks to the global economic downturn. Radcliffe does see the customer data MDM market picking up again, and estimates it will cross the billion-dollar annual revenue mark in 2012.

Radcliffe writes that although the impetus for MDM is increasing, most large organizations continue to struggle with reconciling heterogeneous systems for application and information management, as well as for enterprise resource planning (ERP), characterized by many silos and incomplete and inconsistent data. MDM initiatives can aid in business and technology synergy to achieve "uniformity, accuracy, stewardship, semantic consistency, and accountability," he says. "When creating and managing customer master data, many organizations and vendors originally thought that CRM, ERP, or vertical-industry systems would solve this problem of inconsistent master data spread across multiple systems; but CRM, ERP, or vertical-industry systems weren't designed for the task, and they often created additional silos."

In the meantime, Gartner has made at least one significant change between last year's results and those seen in the new report: The two vendors listed within the Leaders quadrant last year -- IBM and Oracle (for its Siebel Universal Customer Master, or UCM, offering) -- welcome a new member to their midst: Initiate Systems, which topped all vendors in terms of completeness of vision this year. Speaking of vision, another year-over-year change is the introduction of VisionWare, a relatively small United Kingdom–based vendor that Gartner has added as a Niche Player this year, outpacing all the returning Niche Players in terms of completeness of vision.

The rest of the 2009 Magic Quadrant plays out as follows:

Leaders:

• IBM: IBM's MDM customer base continues to grow at a healthy rate, according to the report, with customers reaping the benefits of the company's larger Information On Demand strategy. The solution is well suited for large customer bases and large sales and marketing organizations, according to Radcliffe, who also credits IBM for helping organizations find the business value of information. 
• Initiate Systems: Radcliffe notes that Initiate did well in 2008 -- the company's revenue increased approximately 50 percent to $76 million -- and apparently well enough to earn a promotion from its standing among last year's Visionaries to join this year's Leaders. Gartner calls Initiate the largest of the best-of-breed MDM specialists, and characterizes its primary focus as party data (customer, patient, citizen, or organization). Gartner also describes a "good news, bad news" state of affairs for the company: a strong presence in healthcare-related markets, but a fairly limited reach outside of North America.
• Oracle (Siebel Universal Customer Master, or UCM): Calling 2008 a successful sales year for UCM — Oracle's flagship MDM product — Radcliffe estimates that Oracle ended the year with 170 UCM customers, a year-over-year growth of 26 percent. Oracle is investing heavily in MDM, Radcliffe says -- and it shows, with UCM nudging past IBM this year to become the top offering in terms of ability to execute -- but even if its Customer Data Hub (CDH) (see Niche Players, below) doesn't have UCM's presence, multiple product sets from one vendor can sometimes lead to customer confusion. 

Challengers:

• Duplicating last year's results, no vendors landed in this quadrant.

Visionaries:

• Siperian: Radcliffe writes that "Siperian is still one of the technology pace-setters," with a strong play in the life sciences industry, but he also notes that progress in other industries has been slow.
• D&B Purisma: Radcliffe says that the solution -- the result of Dun & Bradstreet's November 2007 acquisition of Purisma -- reaps the benefits of D&B's resources, and is well integrated and central to D&B's growth strategy. The report states: "Purisma, originally a small best-of-breed MDM of customer data company, now has strong viability…. It is focusing on sales-and-marketing requirements, but needs to manage its rapid growth and the demands of its growing customer base." 

Niche Players:

• DataFlux: The wing of the SAS Institute is mostly known for its data quality solution. Gartner estimates DataFlux's revenue at $39 million, and suggests the growing company brings organizations a "graduated approach," meaning that users can use accelerators to integrate MDM. The key is in starting small and evolving to more-complex MDM projects -- a parallel for DataFlux's MDM efforts, which Gartner describes as small, but growing. The report says, however, that DataFlux needs more MDM references.
  
• Oracle's Customer Data Hub (CDH): The product, Gartner says, is mainly geared toward customers of Oracle's E-Business Suite in product-oriented industries. It has a loyal user base, but innovation is slowed. 
• SAP: With a large and loyal user base, MDM is a key part of SAP's NetWeaver and information management strategy, according to Gartner's findings. SAP's recent three-year roadmap revealed plans to tightly integrate its acquired BusinessObjects Data Services (matching and data profiling capabilities) and NetWeaver's business process management components to create greater process-specific integration between MDM and Business Suite. Radcliffe writes, "SAP MDM is behind the competition but improving in data quality, data profiling, and associated reporting facilities." Integration work remains to be done.
• Sun Microsystems: Sun leverages its open-source community, Mural, to solve data management problems -- but the vendor drops down to the bottom of Gartner's field here, in both completeness of vision and ability to execute. Radcliffe writes that Oracle's pending purchase of Sun may mean that Sun's MDM Suite is shelved in favor of Oracle's own MDM products, except perhaps in the healthcare vertical, where Sun has a particular strength.
• Tibco Software: The Tibco Collaborative Information Manager (CIM) has a flexible approach to data modeling, Radcliffe says. During the past year, Tibco -- which calls itself "a multidomain MDM system" -- has invested strongly in the product, releasing two new versions between June 2008 and February 2009. Gartner dings the vendor, however, for its capabilities in data quality.
• VisionWare: The company's MultiVue product is the only one included in Gartner's report based solely on Microsoft technologies, which positions VisionWare well and brings a lot of leverage. However, Gartner notes that Microsoft will soon enter the MDM space with its SQL Server Master Data Services product -- opening the possibility that Microsoft will end up competing with VisionWare. 
  

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