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Industry Corner: ETL Vendors Expand Their Focus on Integration

Changes are brewing in the business intelligence marketplace as vendors continue the trend of mergers and acquisitions.

Ascential and Mercator

In August, Ascential Software, one of the leading independent extract, transform and load (ETL) vendors in the marketplace, announced its plan to acquire enterprise application integration software (EAI) vendor Mercator Software, in a cash deal valued at $106 million. The combined company will have sales of approximately $250 million and share 3,000 customers. This acquisition expands Ascential’s integration offerings from data integration into application integration, and offers cross-selling opportunities to each company’s customer base. The Mercactor acquisition should provide the financial viability that had many of its customers and prospects concerned.

Ascential has been involved in many acquisitions (and name changes) in the past and in general has an excellent track record. Acquisitions include companies such as Prism (ETL), Vality Technology, Inc. (data cleansing), Metagenix (data profiling) and DoveTail (metadata). The original company was acquired by Informix, had its former management take over control of Informix, sold the database portion to IBM, and then reemerged under the new name Ascential Software in 2001.

The EIA Story

EAI software provides application integration by enabling disparate applications to interoperate by exchanging data and functionality. During the high tech boom of the late 1990s, EAI firms were heralded as the ‘next big thing’ with Wall Street analysts predicting that billions would be spent on this software.

A lot of things have changed since the high tech bubble. The leading independent EAI companies have seen their growth rates contract and many are experiencing quarterly losses. For example, according to Gartner, Mercator’s 2Q03 license revenue dropped 44 percent and revenue dropped 18.4 percent compared to 2Q02. Early adopters of EAI software have seen many of their projects take much longer and cost more because of inflated expectations and much more development work than planned. In addition, larger software vendors, such as IBM, have been taking market share from smaller players. According to the Aberdeen Group, independent EAI vendors SeeBeyond, Mercator, and Vitria have lost revenue and market share this year.

With this acquisition, Ascential expands their data integration product suite into application integration, but is this their ultimate goal? Check out my article in Darwin Magazine on October 15th that discusses EAI and ETL.

Informatica and Striva

In September, Informatica Corporation announced it was acquiring mainframe integration software vendor Striva Corp., for $62 million. Striva provides bulk data movement and change data capture software for mainframe data sources such as
IMS, VSAM, DB2, Adabas, Datacom, and IDMS, as well as midrange systems like the
AS/400 (iSeries). Striva has been a partner of Informatica for two years with 130 customers purchasing the software resold with Informatica’s PowerConnect. Striva also has partnerships with Business Objects, Hummingbird Ltd., Embarcadaro Technologies, and others.

Neither glamorous nor high growth, the market segment for mainframe and legacy applications is still a significant force - GigaGroup estimates it comprises 20 percent of the data integration market. The acquisition reaffirms Informatica’s renewed focus on data integration after its withdrawal from the analytics market this summer.

The acquisition may not be good news for Striva’s partners, some of whom are Informatica competitors who might lose their customers. Their customers needn't worry though; Informatica will be happy to provide them with service.

Informatica and SuperGlu

The Informatica/Striva acquisition follows Informatica’s release of SuperGlu, announced in August during the TDWI conference in Boston. SuperGlu is a web-based metadata management solution used for gathering and analyzing data and application metadata across the enterprise. It focuses on data integration and business intelligence activities. In essence, it is an attempt at providing a metadata hub for data warehousing and business intelligence projects. Metadata has been the poor stepchild of most vendors’ software and enterprise data warehousing or BI initiatives. Like documentation and testing, it is easy to take shortcuts to complete a project – and business users are not going to understand the long-term impact of these shortcuts. SuperGlu is another excellent move by Informatica to expand its data integration footprint with a well-built solution.

There are some concerns on the ultimate impact SuperGlu will have on the market. In its initial SuperGlu release, Informatica primarily provided interoperability with its own ETL and BI products. Certainly if you have deployed Informatica’s offerings, SuperGlu should be considered. However, how well will SuperGlu work with other companies’ (competitors’) BI and ETL products?

Prior to Informatica’s entry into the BI and analytics market it was considered BI vendor-neutral. During that time, many BI companies partnered with Informatica and its first generation of metadata integration capabilities. Many of those BI companies wrote the interfaces themselves to interoperate with Informatica’s metadata APIs. But as Informatica entered into the BI market, it lost its BI vendor-neutral aura. Subsequently, other BI companies, viewing themselves as potential Informatica competitors, either built or acquired their own ETL products.

With most companies having deployed multiple BI products and sometimes multiple ETL products, how does SuperGlu (or any metadata offering) track metadata throughout an enterprise data warehousing/BI environment? Competitive pressures, unfortunately, may work against SuperGlu in enterprises that have deployed non-Informatica ETL and BI products.

You're invited to hear Athena IT Solutions' Rick Sherman deliver the following presentation at the next Boston DAMA meeting.

Title: Establishing Information as a Corporate Asset Using a Data
Integration Framework (abstract)

Date: Thursday October 9, 2003

Time: 1:30 - 3:00 p.m.

Price: There is no charge.

Location: Waltham, Massachusetts - FleetBoston Financial building

Address: One Fleet Place, 1075 Main St, Waltham, MA

Room: One of the conference rooms on the mezzanine level; look for
the sign at the foot of the stairs or ask the security guard for the conference room number

Directions: available at www.geocities.com/BostonDama/oct2003.html

You will need to show your picture ID to enter the parking garage and to enter the building.

You do not need to be a DAMA member to attend.

(Don't miss the next issue of Business Intelligence Briefs! See www.athena-solutions.com to subscribe.)

© 2003 Athena IT Solutions