December 10, 2010 – By year’s end, master data management software revenue will have spiked 14 percent from 2009, reaching $1.5 billion and new levels of adoption, according to new research from Gartner.

However, the majority of enterprises taking on an MDM project will still stumble when finding full return on investment, the analyst firm noted.

In predictions, Gartner researchers notched MDM software markets at a compound annual growth rate of 18 percent, hitting nearly $3 billion by 2014. The research firm predicted that MDM will continue to bring revenues for both big market providers and niche players over the next five years.

MDM software remains attractive even during rough economic times because of its abilities with risk management, system integration and cost reduction possibilities, Gartner noted. John Radcliffe, research vice president at Gartner, said MDM software stands to make continual, double-digit revenue gains because of connections to the cloud and the capabilities it has for CIOs dealing with the swelling waves of data.

Still, it won’t be without hindrances. Through 2015, 66 percent of businesses involved in an MDM initiative will struggle to demonstrate its business value, according to Gartner. Radcliffe said much of this disconnect stems from the lack of an overarching view for data management, particularly outside of IT departments.

“Unless organizations take a holistic, business-driven approach to MDM, addressing governance and metrics requirements in particular, they risk having their MDM programs fail,” Radcliffe said in a news release with the research announcement. “Internal politics won't be brought under control without a governance framework, and without a metrics structure, there will be no way of objectively defining what success looks like and measuring whether or not it has been achieved.”

One alternative that is becoming more appealing is for outside businesses to handle MDM grunt work. Gartner predicts 10 percent of MDM to be fulfilled by software as a service ventures, and that many companies will also deploy private clouds for increasing data workloads.

Read more about the Gartner research report here.

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