Capitalizing on MDM in times of crisis, however, requires an understanding of key underlying business and technology trends. Data from the MDM Institute's quarterly "MDM Reality Check" shows some escalation in scope and funding of MDM and data governance programs in the first half of 2010. The findings from this survey will be presented at the series of MDM Summit conferences throughout 2010 including London, New York City, San Francisco, Sydney and Tokyo.
Enterprise MDM is a major IT initiative being undertaken by a large number of market-leading global 5000 enterprises. Both as an IT discipline and an integrated set of technology solutions, MDM continues to evolve at a rapid pace. Research analysts at the MDM Institute annually produce a set of 10 milestones to help global 5000 enterprises focus efforts for their own large-scale, mission-critical MDM projects. For planning purposes, we identify these milestones with strategic planning assumptions that offer an enlightening view of trends and issues facing IT organizations.
An MDM roadmap helps global enterprises and IT vendors selling into this space utilize strategic planning assumptions to focus their own roadmaps on large-scale and mission-critical MDM projects.
1. MDM Market Maturation
During 2010, the MDM market will broaden and deepen as megavendors repackage/reprice solutions below $1 million. Concurrently, Microsoft and other midmarket solutions will address departmental and small to midsized business needs at prices below $100,000.
Through 2011-12, verticalization/horizontalization of MDM solutions will expand beyond corporate financial reporting, enterprise master patient index (EMPI) in health care, etc. into financial services, government and higher education especially. At the same time, both MDM and packaged application vendors will deliver products (vertical and horizontal) that are natively aware of master data services - and increasingly integrated and dependent upon such master data services.
By 2013, the combined software and services market for enterprise MDM solutions to address both customer and product/thing master data will exceed $4 billion (compound annual growth rate of 15 to 20 percent during 2010-13).
2. MDM Market Momentum
During 2010, large enterprise megavendor MDM solutions from IBM, Informatica, Oracle and SAP will monopolize majority market share in the global 5000 enterprise; midmarket solutions from DataFlux, Information Builders, Kalido, Liaison Technologies, Microsoft, Oracle and Stibo Systems will also prosper. At the same time, specialty MDM applications (such as those from Amdocs, Fiserv, GoldenSource, Orchestra Networks and VisionWare) will continue to thrive by geography and industry.
Through 2011-12, MDM solutions will cannibalize the traditional master customer database business of data service providers (e.g., Acxiom, Austin-Tetra, Dun & Bradstreet, Epsilon and Experian) as these vendors sprint to deliver on-premise data hub solutions in addition to data as a service (hosted/cloud MDM).
By 2012-13, "stack wars" will wane as MDM-centric applications from IBM, Microsoft, Oracle, SAP and Teradata dominate over MDM infrastructure vendors (such as Progress Software, Red Hat and TIBCO).
3. MDM Market Consolidation and Diversification
During 2010, enterprise IT megavendors (IBM, Informatica, Oracle and SAP) will continue M&A-driven R&D gyrations in moving to an enterprise MDM-centric portfolio. Oracle and SAP will be challenged additionally in moving from siloed application architectures into service-oriented types of models (Fusion and NetWeaver).
By 2011, M&A attention will have shifted from MDM hub vendor targets into the more esoteric yet related technologies such as semantic databases. Concurrently, the last standing independent/standalone data quality providers (Clavis, Human Inference, Pitney Bowes Business Insight and Trillium) will succumb to acquisition.
Through 2012, IT megavendors (IBM, Oracle and SAP) will dominate the high end of the MDM market with niche/best-of-breed vendors (DNB/Purisma, Information Builders, Informatica/Siperian, Kalido, Microsoft, Progress Software, Teradata) thriving in specific industries and horizontal/corporate applications.
4. Budgets/Skills
Through 2010-11, global 5000 enterprises will spend $1 million on average for their initial MDM software, with an additional $3 million to $4 million for integration services. SMBs will benefit from enlightened pricing of $250,000 to $500,000 for entry-level MDM from IBM, Oracle, SAP and Informatica. Despite the recession, the majority of MDM programs will receive initial or ongoing funding due to relentless demand for the cross-selling, up-selling, compliance and M&A enablement afforded by MDM programs. On their own, most IT organizations will struggle to justify MDM's business value due to a lack of cooperation across lines of business, high entry-level costs and difficulties in launching appropriate accompanying data governance structures and processes.
Throughout 2011-12, skill shortages will greatly inhibit MDM and data governance program execution and inflame project costs as demand for experienced individuals outstrips market supply for directors of data governance, MDM architects, etc. Concurrently, systems integrators will fill the void but, with the small talent pool available, present the risk of baiting and switching rookies for veterans.
By 2012-13, the MDM job market will stabilize as sufficient numbers of SI benchwarmers retreat back to the comfort of global 5000 enterprise full-time employment. Until then, enterprises will struggle with refilling and reskilling the same resources multiple times (as data management technologies such as Fusion and NetWeaver mature) and protecting these resources from SI recruiters.
5. Data Governance
During 2010, the majority of enterprises will struggle with master data governance as they attempt to evolve from maturity levels one and two (anarchy, feudalism) to levels three or four (monarchy, federalism).
Through 2011, major systems integrators and MDM boutiques will focus on productizing data governance frameworks while MDM software providers struggle to link governance processes with MDM hubs. Concurrently, the MDM megavendors will begin delivery of integrated active data governance frameworks to augment the passive governance of data steward consoles.
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