While there is still a tremendous amount of activity in the master data management space, the market has now matured and spending on MDM projects has declined from an earlier high of $18B to new levels around $12B.

That in itself doesn’t worry Aaron Zornes, chief research officer at the MDM Institute, but many of the products being produced to handle MDM projects still leave much to be desired and force customers to select multiple products to handle all their needs around master data management and data governance.

The challenge for many organizations is determining which products will work effectively with others to produce better results, or if the wrong product selections can still leave gaps in the data management process. MDM products are extremely costly, and the stakes are high.

Adding to that are frustrations with some cloud MDM products, Zornes said.

“We are totally under-whelmed by the cloud MDM products,” Zornes told the audience at the MDM Summit in San Francisco this week. “Cloud MDM will continue to attract many small and mid-sized businesses, but it is woefully underpowered.”

Another area that is being neglected is that of reference data. While Zornes estimated that at least one-third of attendees of the MDM Summit are using reference data, “no one is doing much on it.”

The MDM market has now split into two camps, Zornes said: the four mega-MDM vendors (Informatica, Oracle, SAP and IBM), and dozens of smaller firms that are jockeying for more market share. Strategies include lots of acquisitions, and some products on the market now are recycled products from the acquired players. When the audience was polled by Zornes, many didn’t recognize some new offerings, instead knowing them by their earlier releases under another company banner.

In terms of the strategic use of MDM, two trends dominate right now, Zornes said. Along with MDM investments, organizations are putting more focus on customer relationship management. And while the so-called 'system of record,' or 'single view of the customer,' was the goal of data governance in the past, the trend is moving toward the 'system of engagement.'

Just knowing who a customer is doesn’t mean much, it’s what the organization does with that knowledge that counts. Thaat view is fueling more interest in data governance features.

The good news is that the day is coming when MDM products will truly provide a wide-ranging set of features and functionality that will help an organization control customer data and customer experiences, and vendors are working toward that goal, Zornes noted. But we aren’t there yet.

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