Enterprise architects and CTOs are concerned about the ongoing vendor consolidation in the nascent customer data integration (CDI) and master data management (MDM) market. These fellow travelers on the journey to corporate data governance asked, "What are the key differentiators of a next-generation CDI solution in 2006 and 2007?"
In mid-2005 we identified 12 milestones to be addressed by our research team. This column will discuss the first six milestones, with my next column discussing the remaining six.
1. Market Maturation. The CDI/MDM market shifted gears from early adopter to mainstream as more than 95 percent of financial services, communications services and pharmaceutical/life sciences enterprises actively look to replace homegrown CDI solutions. During 2006-07, CDI solutions for the midsized enterprise will come to market from Microsoft and Oracle as well as the data quality vendors (Pitney Bowes, SAS/DataFlux, Trillium Software, a division of Harte-Hanks). By 2008, the market for CDI solutions (software and services) will exceed $1 billion.
2. Market Momentum. CDI software solutions such as i2 Technologies, IBM/DWL, Oracle/Siebel and SAP will monopolize the majority of the market share. Concurrently, a niche market will arise for hosted CDI/MDM solutions led by early-to-market vendors Alliance Consulting and Unisys. Both mega and niche CDI/MDM vendors will aggrandize the traditional master customer database business of data service providers such as Acxiom, D&B and GUS/Experian. By 2008, every major application and database vendor (including Amdocs, Microsoft, salesforce.com and NCR/Teradata) will provide either native or OEM CDI/MDM capability.
3. Market Consolidation. Mega IT vendors (IBM, Oracle, SAP) will continue marketing gyrations in moving to an enterprise MDM strategy. IBM (SRD/Ascential/CrossWorlds/DWL/Trigo) and Oracle (i-flex/JD Edwards/PeopleSoft/Siebel) will wrestle with many of the same architectural/corporate performance management/metadata/platform issues that forced SAP to withdraw its product from the market (SAP MDM:A2i xCat). While mega IT vendors IBM, Oracle and SAP will dominate in the CDI/MDM hub market, niche/best-of-breed vendors (i2 Technologies, Initiate Systems, Kalido, Siperian) will thrive in specific industries and horizontal/corporate applications.
4. Budgets/Skills. The typical Global 2000-size enterprise will budget/spend $1.2 million for CDI/MDM software solutions, with an additional $4 million for systems integration services. During 2006-07, CDI/MDM skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects and other individuals with strong affinity for data governance will outstrip the market for individuals with actual experience. By 2008, the market will have stabilized as enterprises react by training and protecting their own data governance staff with specific software product expertise.
5. Data Governance. Data governance will become a mainstay of large CDI/MDM projects, as such requests for proposals increasingly require that component. Through 2006-07, major systems integrators and CDI/MDM boutiques will focus on productizing their data governance methodologies. By 2008, the data steward will be a common position as enterprises formalize this function amid increasing recognition of information as a corporate asset.
6. MDM Convergence. Customer and product data interdependencies will quickly broaden CDI requirements - i.e., from "customer" to "product" to "vendor." During 2006 and 2007, niche vendors will provide multihub connectivity (Kalido, Purisma, Siperian, Stratature) via hierarchical management extensions. By 2008, enterprises without an overall long-term MDM strategy will run the ironic risk of building MDM silos.
Hopefully the milestones discussed here will catalyze discussions (and consensus) within your IT organization regarding the roadmap IT professionals must craft for the next three to five years.
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