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« Why We Can Go to the Moon, But We Can't Make Informed Decisions | Main | Breaking BI Bread, or Mixing Livestock Fodder? » July 24, 2007Informatica Jumps Into Bed with SAP
Informatica's blockbuster OEM with German business applications giant earlier this week raised a few eyebrows, especially those that continue to think the data integration software vendor is a sitting duck for acquisition. Truth be told Informatica's pool of OEM opportunity has been shrinking for several years as a result of rampant consolidation in its core business intelligence and data warehousing market. Business Objects, IBM, and Oracle/PeopleSoft all used to be strong and lucrative business partners for Informatica. But that's all changed now as each now wears its own data integration kit. More recently Informatica effectively "self-destructed" a longstanding OEM with data quality vendor Firstlogic after acquiring Similarity Systems. Firstlogic was quickly snapped up by none other than Business Objects. Therefore it's no surprise that industry pundits and observers alike are betting on SAP, currently without a data integration competency of its own in its NetWeaver application integration platform, as a potential suitor. So does this OEM signal a possible future merger between the two companies? Some believe so, saying that few companies -- SAP and Oracle included -- will relish building the type of complex software that Informatica had developed over nearly two and half decades of so. Also, having a robust data integration technology inside of NetWeaver will help SAP to open up its rapidly evolving business intelligence and analytics applications suite more readily to heterogeneous data sources. Remember multi-source data integration has always been the main strength of Informatica's PowerCenter platform. Even though Informatica now maintains OEMs with both SAP and Oracle, it's with the former that it has a likely future with right now. Allying with SAP could well be a covering move against Oracle which recently bought French data integration firm Sunopsis and is seemingly breathing new life into its older Oracle Warehouse Builder data warehousing software as well. However one could also make the argument that SAP is taking a big risk integrating Informatica as a "preferred" data integration technology if it doesn’t harbor ambitions for a take-over somewhere down the road. If Informatica fell into someone else's hands then SAP would probably be forced into a back-up plan. But it could find itself running out of (good) partners pretty soon. Of course that's not to say that another large analytics of application player might not be interested in Informatica. Infor Global Solutions is one company that immediately springs to mind. Regardless of the buyer, Informatica will be a big fish to land, with a market cap of around $1.3 billion. But then again Informatica was the subjected to the bright glare of the acquisition spotlight back in 2004, when it leaked senior executives and reported a string of disappointing quarters. But the company has stood the test of time, no less because data integration remains the most critical, and challenging, task in corporate IT today. So whoever gets their hands on Informatica will be getting some very critical technology indeed. Posted by madansheina in Business Intelligence | Digg This | Add to del.icio.us Trackback Pings TrackBack URL for this entry: |
