Editor’s note: The MDM & Data Governance Summit will be held July 12-14 in San Francisco. In anticipation of that event, Information Management asked summit host Aaron Zornes, president of the MDM Institute, for his assessment of where the master data management market is at the midway point in 2017, and what we can expect for the year ahead.
If I were to characterize the state of the master data management market in a single sentence, in nutshell it would be, "MDM is dead, long live MDM!"
Master data management remains a $2 billion-plus software market that drags along another $3 billion to $5 billion in service revenues each year and is growing at 10 percent or so.
There are under currents and swells in the MDM space as there are in every tech market ... and some sea changes. But the fundamentals remain.
While there is still a lot of excitement about new technologies such as cloud and graph database replacing so called “legacy” technologies, in reality the boring but strategic business processes of onboarding customers and suppliers, and transacting with your customers and suppliers remain fundamental business requirements that cannot be ignored. And these business fundamentals are greatly enhanced by the quality data that MDM brings to the equation.
It seems as if the very large scale ($100 million and up) MDM programs or not as widespread as they were three to five years ago, which is causing some stress on the software vendors and the systems integrators. Many of the MDM programs we see are increasingly tactical rather than enterprise in nature. That is, organizations are more likely to fund MDM programs to solve a specific business problem than a wide range of business problems.
On the other hand, organizations must still comply with regulatory reporting aspects such as Europe’s GDPR, and “know your customer/know your supplier” also continue to drive global business requirements around MDM.
Reference data also still remains a very important tactical investment for many organizations as they realize they must get this aspect under control to help them both transact and report within their company, and outside the company with their strategic supply chain and government partners.
Big data and Hadoop are still topics of interest given the pending flood of information coming from the Internet of things. But in practice, big data it was a very challenging and expensive distraction for certain large vendors such as IBM... who lost their way somewhat in regards to MDM, business intelligence and more.
There is also an undue emphasis on “cloud anything” … software-as- a-service, hosted apps, etc. This is due mostly to the simple minded focus of Wall Street and other financial markets where they believe that no tech company will survive unless it has huge investments, and solid proof, that they have ongoing major transition to cloud-based whatever.
Meanwhile, the uptake by the market for cloud MDM has been rather ho-hum. We can count less than 50 actual semi-native or native cloud MDM installations and many of those are batch analytical MDM supporting data warehouses and data marts ... or they are merely proof of concept exercises (POCs) where the enterprise IT group is testing graph database and other concepts.
We are speaking here about Dell Boomi, Informatica C360 for SFDC and Reltio. IBM has even backed off their prior public stance for cloud MDM they had in place the past two years.
The exception to this is Oracle with their Cloud CDM (customer data management). Oracle makes it a requirement that any cloud app that is purchased (Marketing Cloud, Sales Cloud, Service Cloud) also take on Cloud CDM.
This is a marginally functional MDM platform, not at all up to the feature/functionality of its on-premise predecessors Siebel Universal Customer Master (UCM) and Oracle Customer Data Hub (CDH) for eBusiness Suite applications. However, Oracle’s executive management has a fixation on cloud revenues on paper to satisfy Wall Street expectations. As a result, every Oracle sales rep must sell this Cloud MDM capability when they sell the Oracle Cloud applications.
Another exception to the cloud MDM malaise concerns consultancies. Many of them are ramping up marketing programs to promote “MDM as a Managed Service”. Some top mega systems integrators are shedding thousands of employees as they attempt to become recurring revenue stream businesses, acting more like software vendors and supporting cloud computing services.
Finally, graph technology is enabling cross-domain analytics for the mega vendors and is a key differentiator in the marketplace.
The bottom line is that the fundamental business value drivers of the MDM marketplace remain in place, and MDM continues to evolve and embrace cloud and graph technologies, albeit not as fast as certain vendors’ marketing would lead you to believe.
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