Event
On 1 October 2012, Informatica, a provider of data integration software, announced that it plans to buy Heiler Software, a German vendor of master data management (MDM) of product data solutions and e-procurement. The two companies have been partnering unofficially for about a year.
Analysis
The proposed acquisition will benefit customers of both companies. Informatica will gain retail, distribution and manufacturing expertise. It will also gain access to industry-oriented MDM workflows, content and data model extensions that it would have had to build otherwise. Informatica may be able to address its MDM weaknesses by integrating Heiler's workflow and digital asset management technology with its own MDM. Informatica will also acquire staff that know the MDM of product data space in scenarios in which Informatica has been weakest — for example, e-commerce, ERP, supply chain and procurement.
Heiler focuses on Europe, especially Germany, while Informatica is more global, with an emphasis on the U.S. Gartner believes that Informatica plans to target the large German market where its success has been limited and SAP has dominated. The deal will provide good potential for reselling, but Informatica will have work to do, as Heiler's customers tend to be small or midsize businesses. Heiler has more customers than Informatica in MDM of product data, but some Heiler references say its customer service has been lacking. Informatica is likely to improve this part of Heiler's business.
The acquisition will broaden Informatica's reach in markets related to MDM of product data — including assets, parts, materials and locations, as well as rich content — that can be used in the customer data domain. Buying more data integration or data quality technology would not have filled this gap.
However, Informatica will have to integrate three MDM products: its core Informatica MDM (from its 2010 acquisition of Siperian), MDM of product data (from Heiler) and its cloud-based offering (from its recent acquisition of Data Scout). Informatica will have to rectify product overlaps and fragmented product lines. Heiler's main partner is SAP. Informatica has much more overlap with SAP than Heiler did — another indication that Informatica plans to challenge SAP in Germany.
In the short term, Informatica is likely to sell Heiler's offering as a stand-alone product with increasing degrees of integration. This will lead to greater short-term complexity in Informatica's multidomain or "universal MDM" positioning. It had been promoting universal MDM as a single product platform. This major strategy shift brings challenges in messaging and marketing.
In the longer term, Informatica has to rationalize its MDM products. It has to explain how it will exploit industry-specific content and workflows in its core product, and decide if it will continue to support its procurement catalog management and e-requisitioning offerings.
