Magic Quadrant for Master Data Management of Product Data Solutions

This document was revised on 15 January 2013. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.

Markets are sets of potential buyers that view a product as solving a common, identified need, and that reference each other. Market segments are portions of that generic market that are qualified by more exact criteria, thus grouping potential buyers more tightly. Segmentation may take two forms:

• A generic market may be divided into recognizable submarkets, where the same rules prevail for defining a market.
• An individual vendor may segment the market to target its products more precisely and differentiate itself from (or avoid competing with) other players that address the same overall market. However, the targeted buyers may not know they are part of the same market segment. Such segmentation will not be reflected explicitly in the Magic Quadrant, although it may be reflected implicitly (for example, via placement of a vendor in the Niche Players quadrant).

Master data management (MDM, see Note 1) of product data solutions are software products that:

• Support the global identification, linking and synchronization of product information across heterogeneous data sources through semantic reconciliation of master data
• Create and manage a central, database-based system of record or index of record for master data
• Enable the delivery of a single product view (for all stakeholders) in support of various business processes and benefits
• Support ongoing master data stewardship and governance requirements through workflow-based monitoring and corrective action techniques

MDM implementations and their requirements vary in terms of:

• Instantiation of the product master data — varying from the maintenance of a physical "golden record" to a more virtual, metadata-based, "indexing" structure
• The usage and focus (that is, MDM use case) of the product master data — ranging across use cases for design (information architecture), construction ("building the business"), operations ("running the business") and analytics ("reporting the business")
• Different organization structures spanning small, centralized teams through to global, distributed organizations
• The latency and accessibility of the product master data — varying from real-time, synchronous reading and writing of the master data in a transactional scenario between systems, to message-based, workflow-oriented scenarios of distributed tasks across the organization and legacy-style batch interfaces moving master data in bulk file format

Organizations use MDM of product data solutions as part of an MDM strategy, which in itself is part of a wider enterprise information management (EIM) strategy. An MDM strategy potentially encompasses the management of multiple master data domains, such as product, services, customer, asset, person or party, supplier, and financial masters. As the name suggests, MDM of product data solutions focus on managing product data, a form of "thing" data, whereas MDM of customer data solutions focus on managing customer data, a form of "party" data. There are no other discrete Magic Quadrants for other master data domains due to the relatively low level of discrete market interest to govern those data domains in comparison to customer and product data.

We are routinely asked whether we have an overall MDM Magic Quadrant, but, while we continue to keep this under review, we still believe that it is premature, because MDM needs are very diverse (see "The Five Vectors of Complexity That Define Your MDM Strategy"), leading to different market segments, and the majority of the buying activity and evaluations are still focused on initiatives for specific master data domains. In addition, although many MDM solutions are marketed as multidomain MDM, they don't always conform to our definition of multidomain MDM technology (see Note 2), and we find they have many gaps in their capabilities and experience in handling every data domain (see "A View of Master Data Management Vendors' Experience in Handling Multiple Master Data Domains" and "A View of Master Data Management Vendors' Experience in Handling Multiple Master Data Domains, Part 2").

Gartner's Magic Quadrant for MDM of Product Data Solutions provides insight into the portion of the constantly evolving packaged MDM systems market that focuses on managing product data to support customer and product oriented strategies spanning supply chain management (SCM), enterprise resource planning (ERP), e-Commerce, Procurement and product life cycle management (PLM) applications. It positions relevant technology providers on the basis of their Completeness of Vision relative to the market, and their Ability to Execute on that vision.

MDG-M = Master Data Governance for Material
MDM = Master Data Management

Source: Gartner (November 2012)

Vendor Strengths and Cautions

Agility Multichannel

Website: agilitymultichannel.com

Headquarters: York, U.K.

Agility Multichannel (previously known as Pindar, and still trading under the name Pindar North America in the U.S.) sells Agility, which is positioned as a product information and MDM solution used to support multichannel e-commerce. The currently shipping version is 5.2.03 (general availability [GA] in November 2011). The vendor sells only one product with a simple pricing model. It does not modularize based on individual capabilities. Its top industry segments are industrial/manufacturer (maintenance, repair and operations [MRO], tools, safety, restaurant supplies, and so on), scientific, office/educational supplies and retail/consumer.

Customer base (licensed to manage product data): estimated at 60.

Strengths

• Robust MDM of product data functionality: The core data model is multidomain-capable, though the vendor has a clear focus on meeting user needs to govern product data in support of a multichannel commerce environment. It sports a wide set of capabilities needed in this market segment, including workflow, search, business rules and analytics. There are prebuilt templates consisting of workflows and integration, to support (for example) new product introduction. The UI for the new product seems more flexible than previous releases in that it supports UI widgets that users can change.
• Pricing is competitive: The vendor has the simplest of pricing models, which should be well received by users often confused by vendors with more complex models. We estimate that its average sale price is around $250,000 so it is competitively priced in this market, being on the low side. Customers report being pleased with the range of functionality achieved (including the replacement of multiple legacy processes and applications) with a single product at this price point.
• Visionary customer base: Newer users report good integration with ERP systems (common) and growing interest in authoring in Agility before publishing to ERP systems, which is in contrast to the more typical approach of authoring in ERP and pushing out to MDM. This bodes well for Agility Multichannel, since a forward-thinking customer base is a great asset to first support, and then exploit as a source of new ideas for products.
• Responsive and generally positive references: The vendor identified 15 reference customers, and we achieved an 80% response rate. Sixty-two percent of the reference customers use batch or mainly batch processing for integration to their applications. Seventy-five percent used Agility Multichannel's own professional services. On the whole, the responses were positive for sales support, implementation and product capability.

Cautions

• Small vendor, trying to grow in a competitive market: This vendor went through a management buyout in 2011, and was previously known as Pindar. The new company is more focused on managing product data for multichannel commerce, and this may help it grow. It remains a private company, but its low revenue (Gartner estimates around $6 million in software revenue, equating to approximately 60 customer licenses for its Agility product) makes prospects nervous about its future growth.
• Confusing market position: The newly launched vendor has a different name (outside North America), though the majority of its customers in North America know it as Pindar. This name persists in North America, though the new name is how the company markets itself in the U.K. As such, the vendor is trying to get away from the legacy associated with its previous incarnation, even though the old name is still being used in North America. This overhang is proving a negative for some new prospects, mostly in North America, and provides a weakness for competing vendors to exploit.
• Limited product strategy and differentiation: Though well placed in that part of the MDM of product data market focused on multichannel e-commerce, the vendor has to focus there in the short term to succeed, and is therefore currently ignoring the whole multidomain MDM question. For some users, this will represent a weakness or a gap in its strategy. Additionally, this vendor is behind others in the area of data stewardship support. Lastly, it is less experienced in the MDM of product data market and has fewer customers authoring product data in its solution and publishing to applications like ERP. This will likely emerge over time as a requirement and will drive the product requirements. The niche this vendor focuses on is already aggressively competed over by larger vendors. As such, a clear and simple message indicating how this vendor is superior needs to be developed. If it is not, the vendor will be forced to compete on price alone, and that is not a viable long-term strategy. Given this vendor's broad product footprint and low price, it could be seen as a "value play," even if it does not market itself as such.
• Low reference scores in some key areas: There were some lower-than-average scores related to total cost of ownership (TCO) and responsiveness to new features. On the product side, the workflow capability was reported as below average, as was reporting and analytic support, and the UI was not overly liked either.

Enterworks

Website: www.enterworks.com

Headquarters: Sterling, Virginia, U.S.

This vendor sells Enterworks Enable, which is positioned as a product information management (PIM) solution, one of the scenarios of MDM of product data. The currently shipping version is 6.0 (GA in April 2011). The vendor sells Enterworks Enable with a flat fee without regard to users, servers or any other limitation, so its pricing model is very straightforward. Its top industry segments are distribution/wholesale and manufacturing (discrete).

Customer base (licensed to manage product data): estimated at 180.

Strengths

• Targeted industry focus: Enterworks has a strong product information management focus in wholesale and distribution industries, mostly in North America. This has allowed it to focus its energies on a subset of the overall market and thus, given its smaller size, to compete relatively well.
• Robust PIM product functionality: Enterworks does a good job of targeting a subset of the overall market requirements for MDM of product data, oriented around specific industry segments. Over the years, users have reported on the strength of its workflow capability, which is 100% browser-based. The product notably offers an additional digital asset management capability that oversteps the structured data world and overlaps with content management technologies. It has added in the past year a new supplier portal — a common requirement in distribution-oriented industries. In 2012, it also added its Empower Data Mart, a new reporting offering, which looks promising, that may help meet the needs of newly emerging product data stewards by enabling data quality reporting and analytics.
• Attractive pricing: Users report that this vendor's price is low compared to other vendors, and this is liked by some prospects. The product footprint is quite broad, however, so this is also perceived as a "value" play by prospects.

Cautions

• Lack of momentum: Our estimates show Enterworks is falling behind market growth rates, based on revenue, and losing market share. Additionally, the vendor's share of the client inquiries that Gartner receives about this market has continued to fall, from 4% five years ago to 1% in 2011 and less than that in 2012. Though Enterworks has some large customers, its price point would suggest that it suits small and midsize businesses better than larger organizations, which may account for these observations. See "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market."
• Limited product strategy: Enterworks is avoiding the broader multidomain MDM market dynamic, and this may limit its longer-term options. While it might seem attractive to focus, other vendors with broader visions are likely to encroach on this vendor's "patch" over time, so Enterworks may have fewer options to grow in the future.
• Aging reference base and low scores for long-term indicators: Enterworks identified 12 reference customers, and we achieved a 67% response rate. Scores were average, on the whole. There were lower-than-average scores for the provision of new features in the product over time, and for visibility into the product road map. The customer base appears to be aging, with nearly 60% of the reference customers going live before 2008, which is a higher percentage than for any other vendor in this analysis. Some references and users report a cumbersome and unintuitive UI. All the reference customers we contacted used only Enterworks professional services, which is a rarity in this market. In 2011 the vendor partnered with Datactics, a data quality specialist, but the effect of that relationship has yet to show in the references, as the users reported average scores for product data quality.

Heiler Software

Website: www.heiler.com

Headquarters: Stuttgart, Germany

This vendor sells the Heiler Enterprise Product Information Management suite, an MDM of product data offering. The currently shipping version is 6.0 (GA in April 2012). Heiler sells its offering as one suite (no modules) and for three sizes of use: Standard, Corporate and Enterprise. There are price scales for numbers of users, type of user interaction (light, collaborative and so on), number of target systems and country packs. Its top industry segments are retail, distribution and manufacturing. On 1 October 2012, Informatica announced a public takeover offer for all outstanding shares of Heiler Software. This deal had not closed by the time this analysis was complete, so it is not factored into the analysis

Customer base (licensed to manage product data): estimated at 170.

Strengths

• Robust product functionality: Heiler targets a niche in the broader market, namely organizations that sell across multiple channels. There is also a digital asset management capability that overlaps with content management vendor offerings. There are customers that have implemented or are implementing Heiler PIM with over 1 million records, and a few with a lot more than this. There is some nice visualization associated with its reporting for product data quality and process benchmarking, which is important for the newly emerging role of product data steward.
• Effective marketing: Heiler is a keen marketer. Its share of the client inquiries Gartner receives relating to this market has increased from 1% to 3% in the past year (see "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market"), so it has increased its visibility, and we have also noted its activities in the more general market. In 2011 Heiler completed an interesting survey of its customers with the help of a German university that shone a light on how valuable users are finding a "single version of the truth for product data." Though not representative of the market, and though not totally independent, the survey is interesting, supportive of the vendor's marketing messages, and somewhat in line with our understanding of the market and the benefits of MDM. A new price list is due in 2H12, and this may help to simplify what reference customers report to be a complex price model.
• Improvement in reference response and satisfaction: Heiler has made a major improvement in the number of responses from, and the satisfaction of, its reference customers since two years ago. In 2012 the vendor identified 28 reference customers (the most of any vendor), though we achieved a below-average response rate of only 39%. From those customers that responded, the scores were mostly average, with above-average marks for understanding industry needs, sharing future product plans, and being responsive to new feature requests.

Cautions

• Low reference scores in some key areas: There were again some low scores for Heiler; in particular, its pricing structure was noted as more complex than desired. The majority of reference customers were European, which can be seen as a negative for some North America-based prospects.
• Inhibited reinvestment potential: Our estimates suggest that Heiler may have a low average selling price (ASP). Our estimates for Heiler's software revenue in this market are just under $8 million for approximately 170 customers. In the previous year, we estimate Heiler increased its revenue from just over $6 million and added 40 or more customers. A lower ASP explains a faster-growing client base, but a short-term bid to boost market share based on low prices risks starving Heiler's R&D plans of money and could jeopardize its ability to support customers. This effect is further indicated by past experience with references and customer service. Heiler has begun to address this situation by increasing its prices as of April 2012.
• Limited product strategy: Heiler is very focused on a narrow segment of this market — the niche associated with customer-facing business processes across multiple channels — and a subset of industries. As such, it does not have a credible multidomain product strategy, in particular for customers' master customer data, which is a critical element of a customer-focused strategy for any client. The product road map suggested some customer data capability in 2012, but we have no details yet. Its marketing messages also mention the link between social data, e-commerce and product master data — but again, this remains more vision than reality. Prospects may begin to opt for competitors that have a more concrete strategy for additional domains and related technologies such as data quality and information stewardship support.

hybris

Website: www.hybris.com

Headquarters: Munich, Germany

This vendor sells hybris Product Content Management (PCM), an MDM of product data solution, among a suite of business applications for multichannel commerce. The currently shipping version of PCM is 4.7 (GA in June 2012). The PCM application is licensed based on the number of servers/cores. There are additional modules available priced the same way, such as digital asset management and advanced security module. Its top industry segments are manufacturing, retail and wholesale.

Customer base (licensed to manage product data): estimated at 145.

Strengths

• Broad product capability: Hybris PCM is a strong solution focused on a narrow set of business requirements. The product has some nice features, ranging from a user-oriented UI for processes such as new product onboarding through workflow. It sports its own data quality capability, and the offering also supports a digital asset management capability. Implementations show that hybris PCM integrated well with ERP systems (of systems of reference) but also on a stand-alone basis without ERP (as systems of record) for product data.
• Good revenue growth: This vendor's revenue grew substantially in 2011 both overall and for MDM — well above the market averages. Gartner estimates that, as of the end of March 2012, hybris had 145 MDM of product data customers, equating to about $15 million in software revenue for MDM of product data. This compares to the previous year's approximately $10 million for 125 customers. This is commensurate with the growth in this vendor's share of the inquiries from Gartner clients relating to this market. Its long-term average of 1% has increased to 3% in the past year. See "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market."
• Targeted industry focus: The vendor only targets organizations with a focus on e-commerce (B2B and business to consumer) across multiple channels. This has resulted in a focus on a narrow set of industries, but has allowed the vendor to leverage its reference base and past investments in its product offering. While this strategy has proven less successful for other vendors in this market, both the revenue trend and customer references show that it is effective for hybris. The vendor is active in North America, Europe and Asia/Pacific.

Cautions

• Limited product strategy: The new data quality analytics do help the emerging role of the data steward, but hybris has not led in this area. Its reports are basic, and there is, as yet, a lack of centralized information stewardship capability and clarity of its cloud strategy. The vendor has shared its goals for entering the MDM of customer data market, with a customer information hub, as part of its long-term road map. However, this vision has little detail at this time. Prospects may begin to opt for competitors that have a more concrete strategy for additional domains and related technologies.
• Business priorities outside MDM: To be competitive in the MDM of customer data market, substantial investment will be needed in terms of technology and organization infrastructure. With its acquisition of iCongo in 2011, hybris' investment priorities seem focused on business applications, not information management. The vendor appears challenged to do well with its competing solution objectives, but it is hoped that continued financial growth, and increased management focus, can provide the funds and means to help address this issue.
• Low reference scores in key areas: Hybris identified 12 reference customers, and we achieved a 92% response rate, which was above average. Hybris scored below average for the following: understanding of the business application of MDM; responsiveness to requests for new features; TCO; and pricing simplicity. Overall product functionality was reasonable (with a below-average aggregate score for manageability and security), but there were at least three references with low scores in most product rating categories. At least one reference highlighted shortcomings in the partners hybris uses to implement its offering.

IBM (InfoSphere MDM Advanced Edition)

Website: www.ibm.com

Headquarters: Armonk, New York, U.S.

IBM's InfoSphere Master Data Management v.10.0 (GA since October 2011) comes in four options: Standard, Collaborative, Advanced and Enterprise Editions. v10.0 is the first step in a multiyear convergence road map that unifies and integrates IBM's three MDM products (InfoSphere MDM Server, InfoSphere MDM Server for Product Information Management and Initiate Master Data Service [MDS]), and IBM is busy working on further integration to create a single software stack that includes the key capabilities of each product, together with common UIs, workflow, services, data stores and metadata. InfoSphere MDM Advanced Edition is derived from a combination of the prior products: Initiate MDS and InfoSphere MDM Server. Price points for InfoSphere MDM Advanced Edition vary by industry, by data domain (individual, organization, account, product, custom), and by the number of managed records per data domain type. Its top industry segments for product master data are financial services and retail.

In this Magic Quadrant, we evaluate IBM InfoSphere MDM Advanced Edition as well as IBM InfoSphere MDM Collaborative Edition, since IBM offers both products in this market, though it targets each depending on the complexity and scenario related to MDM of product data. Initially, Collaborative Edition was the first and only MDM offering, but over time, it has been refocused on scenarios that require capability oriented toward central authorship of data, with complex workflow support — common in many product and service data scenarios. More recently, Advanced Edition has also been used to master product data, where there is less focus on central authoring and workflow, and a greater need for real-time/messaging integration.

Customer base of InfoSphere MDM Advanced Edition (licensed to manage product data): estimated at over 100.

Strengths

• Broad information management strategy includes strong MDM portfolio: InfoSphere MDM Advanced Edition is part of IBM's Information Management portfolio, which includes business intelligence (BI), performance management, information integration, warehousing and management, content management, and data management. This is an attractive proposition for organizations looking for a wide range of information management functionality from a single, highly viable vendor. InfoSphere MDM leverages other products from within the Information Management group, such as InfoSphere Information Server for data integration, and the InfoSphere BigInsights, InfoSphere Streams, and InfoSphere Data Explorer big-data-related products.
• Good prepackaged data model and services: IBM InfoSphere MDM Advanced Edition comprises InfoSphere MDM Server and Initiate MDS. The InfoSphere MDM Server product contains a very capable and extensible prepackaged party data model (with accompanying capabilities to store light product and account data, mostly for the financial services sector) and provides the capability to model new data domains as required. The new Adaptive Services Interface (ASI) provides easy graphical mapping tools to allow customers to expose tailored Web services that meet their needs for the content and terminology of the service. Role-based UIs have capabilities such as graphical data visualization and hierarchy management, and customers can leverage the InfoSphere MDM Application Toolkit to extend the existing UIs and to generate new ones.
• Lead product for multidomain MDM: In the past couple of years, the InfoSphere MDM Server product, part of the Advanced Edition, has emerged as the lead product for multidomain MDM in a single instance, especially when a centralized transactional implementation style is desired (for Gartner's definitions of implementation styles, see Note 4). A growing number of users of this style use this offering to master product data, since their requirements are not, in general, as complex as those that require the capabilities of the Collaborative Edition, such as manufacturing and distribution. These users are thus aligned with the main product in IBM's arsenal. Such organizations are also in a better position if their needs evolve to master additional data domains, since the Advanced Edition would be a natural product offering from IBM for this. This should lead to a simpler product road map for these customers.
• Market momentum: IBM's MDM customer base continues to grow, benefiting from the vendor's large sales and marketing organization, and its large customer base. We estimate that at the end of 1Q12 IBM had a total of over 700 licensed MDM customers, with over 100 customers managing products using Advanced Edition. We estimate that IBM's 2011 MDM-of-product-data-related revenue was $62 million, including $19 million for Advanced Edition. Advanced Edition is particularly strong in financial services, and IBM maintains a strong global balance of clients.

Cautions

• Complexity within the new InfoSphere MDM product: At first sight, the IBM InfoSphere MDM go-to-market story is simple: There is one product with multiple editions. On further investigation, however, it is complex, and the current inconsistencies in underlying technologies, UIs and workflows that result from three separate MDM acquisitions become more obvious to users. These inconsistencies will continue to confuse and create complexity for prospects and current customers until the different editions are fully integrated. In the meantime, organizations will need to carefully think through the implications of starting to manage product data with a transactional style and then potentially moving to a more workflow-oriented implementation such as that provided by Collaborative Edition.
• Challenging future product convergence road map: IBM has shared a road map with its clients for how it will integrate the three prior MDM products into a single stack with three embedded MDM engines. IBM plans to provide a single database instance for all master data and metadata; a single application instance (within an application server container); a single service layer; a single installation, configuration and maintenance layer; and a single UI layer for governance. This will be a multiyear journey, as IBM provides increasing integration between the different "engines" and creates common shared services. Version 10.0 is a good first step, though it still requires multiple instances and tooling. There is also a risk that IBM could devote too much of its energy to the convergence road map, as opposed to innovation.
• Prepackaged approach is not for everyone and functionality is behind in some areas: Although Advanced Edition is a very capable product with a prepackaged out-of-the-box data model and services library, some organizations are looking for a more client-driven data modeling approach (as found in Collaborative Edition). IBM does offer a "platform" version of Advanced Edition called Custom Domain Hub Stand Alone, but not many customers are leveraging it yet. Also, IBM has more work to do in areas such as embedded analytics, master data stewardship, business rules governance and business process management (BPM)/workflow integration. These functionalities are not yet available to all editions in a consistent fashion. On the multidomain front, all editions can support multiple domains to a degree, but there are currently differences across editions here as well. Users with complex product data MDM requirements will likely look at Collaborative Edition, rather than the more "basic" Advanced Edition.
• Low number of references: Despite the notable growth in the number of customers using Advanced Edition, IBM identified only three reference customers for this product. The one reference customer that responded to us affirmed that it is mastering product data, and said it had started with customer data and added product data later. Users should be extra careful checking which products IBM reference customers actually used and why; and how complex their product data environments and requirements really are.

IBM (InfoSphere MDM Collaborative Edition)

Website: www.ibm.com

Headquarters: Armonk, New York, U.S.

IBM's InfoSphere Master Data Management v.10.0 (GA since October 2011) comes in four options: Standard, Collaborative, Advanced and Enterprise Editions. v10.0 is the first step in a multiyear convergence road map that unifies and integrates IBM's three prior MDM products (InfoSphere MDM Server, InfoSphere MDM Server for PIM and Initiate MDS), and IBM is busy working on further integration to create a single software stack that includes the key capabilities of each product, together with common UIs, workflow, services, data stores and metadata. InfoSphere MDM Collaborative Edition is derived from the vendor's first acquisition in the MDM market, that being Trigo Technologies. The pricing for InfoSphere MDM Collaborative Edition is simpler than IBM's other MDM products as it is priced as a multi- or any-domain MDM offering — there is no change in price based on what is being mastered. There is a charge, however, due to the number of managed records. Its top industry segments are financial services, distribution/retail and healthcare.

In this Magic Quadrant, we evaluate IBM InfoSphere MDM Collaborative Edition as well as Advanced Edition, since IBM offers both products in this market, though it targets each depending on the complexity and scenario related to MDM of product data. Initially, Collaborative Edition was the first and only MDM offering period, but over time, it has been refocused on those scenarios that require capability oriented toward central authorship of data, with complex workflow support — common in many product and service data scenarios. Advanced Edition has been historically used to master product data, where there was less focus on central authoring and workflow, and a greater need for real-time/messaging integration. However, with the addition of the Collaborative Edition service-oriented architecture (SOA) layer, Advanced Edition is now used primarily as a consuming system of Collaborative Edition to tie products with other domains and establish a single multidomain hub.

Customer base of InfoSphere MDM Collaborative Edition (licensed to manage product data): estimated at over 200.

Strengths

• Deep product functionality and road map: In 2012, IBM improved the integration of its Collaborative Edition with its best-of-breed business rule management capability via a previous acquisition (IBM Operational Decision Manager, formerly Ilog). This new capability adds to what was already a very strong offering in this segment, sporting an extensible data model and capable workflow. The next releases of this product should see integration with text mining, to advance its capabilities in mastering and governing content (shared metadata) and increased sharing of common data quality services (the Initiate MDS matching engine) with its other MDM offerings. The integration between Advanced Edition and its own BPM engine will also likely be extended to Collaborative Edition.
• Strong market momentum: IBM's MDM customer base continues to grow, benefiting from the vendor's large sales and marketing organization, and its large customer base. We estimate that at the end of 1Q12 IBM had a total of over 700 licensed MDM customers, with over 200 customers managing product data using Collaborative Edition. We estimate that IBM's 2011 MDM-of-product-data-related revenue was $62 million, including $43 million for Collaborative Edition. Collaborative Edition is particularly strong in retail, manufacturing and related distributionlike industries, and IBM maintains a strong global balance of clients. The vendor's share of the inquiries from Gartner clients relating to this market has also increased, from 16% to 21% in the past year. See "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market."
• Simple pricing and licensing model: Collaborative Edition's core competency is with "thing" data, including product data. It can potentially model other domains, including customer, but this is done opportunistically and typically in the context of specific industry requirements. The product also focuses on operational MDM use cases and does not appear often in analytical MDM use cases. The strong product capability is supplemented by its pricing and licensing simplicity. Of all the MDM products IBM offers, Collaborative Edition is priced as if it were a multidomain product since there is no price or license restriction based on data domains. IBM's other MDM products, positioned as stronger multidomain offerings, are charged for based on the number of different object types, and are thus more complex.

Cautions

• Complexity within the new InfoSphere MDM product: At first sight, the IBM InfoSphere MDM go-to-market story is simple: There is one product with multiple editions. On further investigation, however, it is complex, and the current inconsistencies in underlying technologies, UIs and workflows that result from three separate MDM acquisitions become more obvious to users. These inconsistencies will continue to confuse and create complexity for prospects and current customers until the different editions are fully integrated. In the meantime, organizations will need to carefully think through the implications of starting to manage product data with a transactional style and then potentially moving to a more workflow-oriented implementation such as that provided by Collaborative Edition.
• Challenging future product convergence road map: IBM has shared a road map with its clients for how it will integrate the three prior MDM products into a single stack with three embedded MDM engines. IBM plans to provide a single database instance for all master data and metadata; a single application instance (within an application server container); a single service layer; a single installation, configuration and maintenance layer; and a single UI layer for governance. This will be a multiyear journey, as IBM provides increasing integration between the different "engines" and creates common shared services. Version 10.0 is a good first step, though it still requires multiple instances and tooling. There is also a risk that IBM could devote too much of its energy to the convergence road map, as opposed to innovation.
• Low reference scores in key areas: IBM identified 14 reference customers, and we achieved a 79% response rate, which was just above average. The vast majority (70%) reported a centralized implementation style, and 60% do most or all of the integration between the MDM hub and business applications in batch mode. Some users scored the product below average in the area of reporting and analytics, which may be mitigated by the vendor's current efforts to try to improve support for the data steward. Additionally, other implementation styles were scored low; usually IBM would need to offer a different product to support other styles, which highlights the constraints of a product strategy bounded by historical acquisitions.

Informatica

Website: www.informatica.com

Headquarters: Redwood City, California, U.S.

Informatica positions Informatica MDM (based on technology derived from the Siperian acquisition in 2010) under the moniker of "Universal MDM," and claims the ability to handle all multidomain, multistyle, multideployment and multiuse requirements on a single platform. In September 2012, Informatica acquired Data Scout to provide an MDM solution to salesforce.com users called Informatica Cloud MDM, a multitenant software as a service (SaaS) offering for customer data on salesforce.com only. Informatica MDM, together with Informatica's data integration and data quality tool offerings, makes up the Informatica 9.5 platform. Informatica MDM v.9.5 became generally available in June 2012. Pricing is by data domain, then the number of records per data domain. Informatica Data Controls cost extra and are licensed on the basis of the number of users. On 1 October 2012, Informatica announced a public takeover offer for all outstanding shares of Heiler Software. This deal had not closed by the time this analysis was complete, and is not factored into the analysis

Customer base (licensed to manage product data): estimated at 50.

Strengths

• Growing momentum: Informatica sees MDM as key to its growth strategy, is strongly promoting MDM and is growing its MDM business with great success. It is increasingly able to cross-sell its MDM, data integration and data quality products and to secure multidomain MDM deals. We estimate that Informatica's 2011 MDM revenue was $79 million (a 32% growth rate), with MDM-of-product-data-related revenue of $10 million (a 25% growth rate). We also estimate that, at the end of March 2012, Informatica had a total of 200 licensed MDM customers, with 50 of them managing product data. Informatica claims 94 customer licenses for product data.
• Good industry spread and strong partner ecosystem: Informatica MDM has customers spread across many industries, including financial services, retail and manufacturing, and it has a particular strength in life sciences. Informatica is attractive to potential MDM service provider partners, and it has several partners, such as Accenture, Capgemini, Cognizant and Wipro, developing both horizontal and industry assets on top of Informatica MDM. Informatica also supports the packaging of design assets (data models, data and integration services, UIs, and so on) from successful implementations by its clients and partners for reuse as starting points in new implementations. The Informatica Marketplace is increasingly serving as a delivery vehicle for this collateral.
• Flexible MDM product capable of managing multiple domains: Informatica MDM offers a flexible, integrated, client-driven MDM platform with strength in hierarchy management. It supports multiple data domains, including party, product and location data, plus reference data, in a single product, but its core strength is managing customer data. It has good proof points with B2C and B2B customers, and has several customers running very large volumes of customer data records, indicating good performance and scalability. This has yet to transform into competitive advantages in the product domain, since its requirements are generally different from those of customer data. As such, Informatica has predominantly focused on its strengths, which tend to relate to finished product (data) in customer-facing distribution environments (quite common in the life sciences sector). The Informatica Data Director is a good example of a single solution used by power users for data entry as well as data stewards. Implementations under way have shown that, during the next year, Informatica may produce very effective references that show it can handle the more complex scenarios common in complex product data environments.
• Continuing innovation: Informatica continues to innovate. For example, Informatica Data Controls provides a framework for developing MDM-based applets that can be embedded in existing applications. Informatica MDM is already available in the cloud through a separate solution — gained with the acquisition of Data Scout in August 2012. Additionally, Informatica has invested significantly in the enablement of data stewardship functions on tablets and other mobile devices, and in the big data area there are plans to release a matching capability for Hadoop within the Informatica MDM product. Longer term, the road map includes a facility called Semantic Master that creates a "best version of the truth" across structured and unstructured data.

Cautions

• Industry knowledge gaps: Despite its penchant for packing up data models and data integration services, Informatica has not made as much progress in the past year on delivering additional industry-oriented solutions. The industries best known to the vendor reflect its initial experience with customer data, and extensions into product data with its initial clients. Thus, it does not have as strong a customer base in retail, manufacturing or industrial segments, and is stronger in financial services, public sector and pharmaceuticals. This impedes its ability to penetrate and compete with stronger vendors in the newer industries. The vendor remains focused on a "build" strategy for this market segment, and even partners informally and opportunistically with PIM vendors stronger in this market, such as Heiler Software.
• MDM platform story doesn't suit everyone: Although the Informatica MDM platform provides a high degree of flexibility, it does not offer the same degree of prepackaged data model, business services, workflow facilities, data-authoring tools and industry specialization as some other products. This could mean that organizations using Informatica MDM may expend more effort in building up functionality, as opposed to configuring prepackaged facilities. It depends on how well the prepackaged facilities fit the requirements. Even its Data Controls could be developed and packaged to differentiate itself against stronger vendors in this market, if the vendor had more knowledge about supply chain, e-commerce, and ERP business applications.
• Gaps remain, relative to the Universal MDM vision: Informatica still has some way to go to meet all the MDM requirements of every industry, every data domain, every use case, every implementation style and every organizational structure (that is, what Gartner calls multivector MDM). Although it has an increasing number of customers licensed for multiple domains, Informatica MDM's core competency is still in managing customer data, and its revenue and experience are very skewed toward that. It does not provide the sophisticated collaborative workflow that business users need to author and manage many data domains, types of data and usage scenarios. It needs to build better workflow-based assets and a more complete data stewardship capability to fill this gap and go beyond what Informatica Data Director currently offers. The confusingly named Informatica Cloud MDM is actually an MDM of customer data offering for salesforce.com users only, and not a multidomain cloud-based MDM offering. For general cloud-based MDM and multidomain MDM requirements, the original Informatica MDM product would be positioned. So, for enterprise-scale MDM programs, there are now two code sets. This detracts from the vendor's previous message of simplicity based on one MDM offering. There are also concerns about Informatica's overall license revenue shortfalls in 2Q12 and 3Q12.
• Low reference scores in key areas, and many implementations in styles not typical for product data: Informatica identified 12 reference customers, and we achieved a response rate of 83%, which is above average. The vendor scored low for TCO, understanding of industry requirements, delivering a continuous stream of innovations, and responsiveness. Only 33% of the reference customers said they author data in the hub, which is lower than typical for product data; 50% are consolidating data from external sources, which is higher than typical. Half the reference customers are doing batch product data integration; the rest are nearer real-time or message-based integration. These reference numbers are more typical of organizations mastering customer data. Year-over-year product scores did show improvement, but gaps remain: Its UI remains "below average," as do its reporting and analytics, which are key to data stewardship usage.

Oracle

Website: www.oracle.com

Headquarters: Redwood Shores, California, U.S.

Oracle has a strong, though complex (in terms of number of offerings), portfolio of domain-specific MDM products that include prepackaged data models. The MDM portfolio includes two products that address MDM of product data solution needs: Oracle Fusion Product Hub (which is positioned for most end-user scenarios with exceptions) and Oracle Product Data Hub (PDH) (positioned for the exceptions, these being single-instance E-Business Suite [EBS] users and those in the telecommunications industry). Fusion Product Hub did not meet the revenue requirement for inclusion in this Magic Quadrant. The vast majority of Oracle's customers and reference customers are on Oracle PDH, and that is what is evaluated here. There are other products that are used to manage product data in analytical MDM scenarios, and there are also legacy industry-specific offerings. Oracle PDH Release 12.1.3 became generally available in August 2010, and the next major release should, we estimate, become available by early 2013. The next version, potentially called Release 12.2, will become available in 4Q12. Pricing is available on Oracle's website, and is shown as Oracle Product Hub. Pricing is based on the number of records stored in the hub.

Customer base for Oracle PDH (licensed to manage product data): estimated at 440.

Strengths

• Strong MDM portfolio covering multiple data domains, industries and use cases: Oracle has a broad range of MDM assets that organizations can leverage to manage multiple domains, industry requirements and use cases. MDM is strategic for Oracle, and it had total Gartner-estimated MDM revenue of $220 million in 2011. This represents a growth of 34% from 2010. We estimate that Oracle's 2011 revenue related to MDM of product data was $72 million (versus $54 million in 2010), with Oracle Fusion Product Hub generating $1.4 million.
• Oracle PDH can be a good fit for Oracle EBS customers and can form part of a multidomain solution: Oracle PDH is specifically targeted at organizations with investments in Oracle's EBS applications and particularly appeals to B2B product-oriented organizations, and also to non-Oracle EBS users. It can form part of a multidomain MDM solution, as PDH can be deployed with Oracle Customer Hub, Supplier Hub and Site Hub in a single instance, since it shares a common data model. Oracle is continuing the long-term development of Oracle PDH under the Oracle Applications Unlimited program.
• Deep MDM of product data functionality: Oracle PDH has a rich prepackaged product data model, derived from the EBS Data Model. PDH is increasingly leveraging more components of Oracle Fusion Middleware (OFM) and the evolving standard MDM platform. The net effect is that the functionality continues to improve. For example, PDH R.12.1.3 leverages OFM 11g as the native application server. Also, Oracle's Enterprise Data Quality Platform, based on its previous acquisition of Silver Creek Systems, has been further extended with the addition of Datanomics technology, further extending what was a strong data quality offering for product data.
• Evolving support for information stewardship: Users of Oracle Product Hub can leverage the Oracle Enterprise Data Quality Platform to support important aspects of the role of (product) data steward, related to analytics and dashboards. There are other tools in the Oracle Middleware stack that can be added to round out the support for this role, such as metadata management and data lineage.

Cautions

• Shifting product priorities: Oracle PDH is not the only Oracle product in this market, and investments now have to "double up" in that functionality may need to be duplicated in the newer Fusion MDM product as well as the Oracle PDH. The PDH has the bulk of the Oracle MDM customer base in this market segment, and although growth in customer numbers has slowed significantly, revenue still seems to be increasing well, and maintenance revenue is increasingly important. In the short term, PDH remains a viable product for specific EBS customers, and is supported by Applications Unlimited. In the long term, we recommend that Oracle PDH customers plan for a migration to Fusion Product Hub, when it has gained greater maturity, though Oracle itself does not offer this advice.
• Confusing vision for information stewardship at MDM level: Each MDM offering seems to have developed its own set of analytics and even dashboard for presenting the results of data quality routines. The main MDM product lines for product data, customer data and Fusion all have their own data stewardship offerings or data governance manager. There is no formal or published plan to unify these capabilities, and to round out the future offering, so users will have to operate with fragmented support for the time being.
• Investment is mainly focused on leveraging the Fusion MDM platform: Overall, we are not seeing innovation, and Oracle's investments in Oracle PDH are mainly directed toward leveraging OFM and Oracle's now-standard Fusion MDM platform. This will modernize the underlying technology and will add a degree of new functionality, such as better data quality tooling, where Oracle is increasingly leveraging and tightly integrating its Enterprise Data Quality offering. The data model within Oracle PDH is derived from, and based on, the EBS Data Model.
• Low reference scores in key areas: Oracle identified 10 reference customers, and we achieved a response rate of 70%, which was above average. Oracle scored lower than average scores for understanding vertical needs; TCO; and understanding information governance enterprisewide. Oracle also scored low for continuous flow of new features and innovation. Prospects for the new product (Fusion Product Hub) will need to take care when checking Oracle references for MDM since the vast majority will be using a different product from the one being sold, independent of any Oracle application installation.

Orchestra Networks

Websites: www.orchestranetworks.com, www.smartdatagovernance.com

Headquarters: Paris, France

Orchestra Networks sells an MDM offering, EBX. The vendor has a strong client base in France, has a presence in the U.K., and is rapidly gaining customers in North America. Pricing is based on the number of MDM instances — for example, one instance for production and another for development. The latest release is EBX version 5.2 (GA in April 2012). This vendor's top industry segments are banking/financial services, manufacturing and life sciences.

Customer base (licensed to manage product data): estimated at 45.

Strengths

• Growing customer base and marketing presence: Orchestra Networks has a strong client list in France, and is building a presence in North America, particularly in the financial services sector. Gartner estimates that, at the end of 2011, Orchestra Networks had a total of 75 licensed MDM customers. We estimate that it has around 45 fixed customers managing product data, and of the 75 licensed MDM customers there are 60 customers licensed for multiple data domains. Orchestra Networks expects that 50% of its overall revenue will originate from U.S. sources. We estimate that Orchestra Networks' total 2011 MDM revenue was $10.7 million, with $4.4 million MDM of product data revenue. The vendor's share of the client inquiries received by Gartner relating to this market has grown from 1% to 4% per year (year to March 2012) — see "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market."
• Flexible data model with good workflow: Orchestra Networks' EBX platform provides flexible, browser-based and very accessible data modeling facilities for both product data authoring and maintenance functions, based on XML schemas. The current release, EBX5, can also support relational schemas for higher-volume, transactional usage patterns. The two schema modes may also be used in combination in a single hub instance. EBX contains native support for data versioning to support "as of" data access, which is important in complex product environments, especially if external regulations require this capability, as well as robust version management for the data model itself. The workflow capability looks strong, and this came out in our reference calls.
• Robust multidomain and hierarchy management capabilities: Orchestra Networks' MDM business was initially based mainly on managing product and employee data, but now an increasing number of customers are managing customer master data (currently in particular in the B2B space), mainly in a workflow-oriented operational MDM use case with central authoring. The vendor is thus creating an effective multidomain MDM business, even if it does not address the most complex scenarios for either product data or customer data. For a growing number of users, this is seen as a practical approach to mastering multiple domains with one offering.
• Attractive pricing model and cloud-based deployment option: Orchestra Networks does not charge for its software based on the number of source data records being mastered in an on-premises deployment. EBX is generally licensed on a per-instance basis (with graduated charges based on whether instances are production or development), with "per project" licenses being sold for smaller initial implementations. Orchestra also offers a cloud deployment option, www.smartdatagovernance.com, which starts at a reasonable subscription price point (although there is a per-source record component that should be considered) and is based on the same EBX software used for on-premises implementations, making it easier to move to on-premises should the client desire to do so.

Cautions

• Small vendor with big ideas: Orchestra Networks has a good solution for MDM of product data, while at the same time being able to offer good support for multidomain MDM. It is a smaller vendor with a similar strategy to much larger vendors, so it does seem to be taking on the world. Its partnering strategy has met with mixed success over the years, and it remains therefore at risk of acquisition.
• Behind best in class in some aspects of MDM of product data solution functionality: EBX does not compete equally well in every sector of this market, specifically where product business rules, workflow or data model complexities are high, such as is common in multichannel integration supporting e-commerce applications. Though reference customers report that the vendor meets industry requirements, it is deliberately avoiding the more differentiated industry requirements, and this works up to a point. But in order to progress in this market, the vendor needs to build up its capability in prepackaged industry data models, business-oriented workflows and more business user UIs.
• Low reference response rate and low scores in key areas: Orchestra Networks identified 14 reference customers, and we were able to achieve a 36% response rate, which was below the average. Seventy-five percent of the references reported that they are using EBX for operational MDM; the same number said they use batch integration between EBX and their business applications. Some product areas were scored "below average," such as product data quality tools, UI (business use of), system availability and support for multiple implementation styles.
• Innovation gaps: Though this vendor has innovated in some areas (for example, cloud-based MDM), it has not invested (yet) in other areas. The vendor has yet to build out the capability to support the "day in the life" of the data steward. The requirements for this have become more defined in 2012, and several other vendors are working on this area. Additionally, while the cloud provides some innovation, the vendor has not sought to exploit the opportunity related to MDM applets. This lack of innovation may be due to small size and inability to invest broadly.

Riversand

Website: www.riversand.com

Headquarters: Houston, Texas, U.S.

Riversand sells an MDM offering, MDMCenter. The latest release is MDMCenter 7.0 (GA in July 2012). There is a base product price covering a core set of users and domains; additional users and domains attract additional charges. There is also an enterprise (that is, unlimited) option. There are additional models (for example, Media Asset Management) with their own prices. Riversand's top industry segments are retail, manufacturing/distribution and energy.

Customer base (licensed to manage product data): estimated at 45.

Strengths

• Strong references and client relationships: Riversand has stood out in the past with very good references. This strategy worked early on, but strains started to show two years ago as the customer base grew. The vendor now seems to be overcoming this issue by hiring seasoned professionals to establish more formal processes to manage customer service. The vendor identified nine reference customers, and we achieved a response rate of 56%, which was average. Every reference confirmed that Riversand won a competitive bid — there were no noncompetitive cycles. The vendor scored average or above for understanding industry requirements; providing a continuous stream of new features and innovations; and response to requests for support. Its product capability scores were very respectable.
• Sustained revenue growth: In the past, Riversand has grown one year, only to contract the following year. This cycle has repeated, but in 2011, and judging from early signs in 2012, Riversand seems to have finally established a solid revenue platform on which to build. Gartner estimates this vendor had 45 customers mastering product data (and other domains) as of 1Q12, and will generate approximately $12 million in MDM software revenue in 2012 (representing 50% growth). This vendor's share of the client inquiries received by Gartner relating to this market grew from 3% to 8% in the year to March 2012 — see "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market."
• Robust product capability: Riversand addresses the more complex requirements found in this MDM market segment, but also addresses and sells into the multidomain MDM market. It does not yet compete in the MDM of customer data solutions market, but does have customers mastering other party data, such as supplier data. Its data modeling is flexible, and its metadata management capability, part of the MDM offering, makes it a particularly attractive offering for reference data management and for evolving MDM into a broader EIM strategy. The product also sports a range of analytic and problem-solving dashboards that are driving the interest in supporting the emerging role of the data steward.
• Flexible support for all MDM of product data scenarios: This vendor works well in any MDM of product data scenario. It can work well in multichannel commerce environments, with or without a central ERP system installed, with or alongside PLM applications. Its offering works well as a central, multidomain hierarchy management solution, supporting customer-facing or supplier-facing business processes, as well as in nontraditional uses such as service data or asset data. As such, it can meet a wide range of requirements.

Cautions

• Marketing strategy in transition: Riversand is in the middle of a wholesale change in its marketing strategy. In the past, it has tried to be perceived as a leader in industries focused on rich product data used across multiple customer-facing channels (where PIM emerged from), as well as in a more application-neutral MDM segment and multidomain MDM. Technically, its solution can compete in all three arenas — but it is hard to create the perception that it is a leader in segments that are often, in the minds of prospects, very different. Riversand should strive to market a singular focus in every segment. The vendor's new hires in marketing, sales and professional services in 2012 and its new website might help to clarify and simplify its messaging and positioning, but this remains to be seen.
• Emphasis shift to multidomain MDM: Technically, Riversand's solution is designed to be multidomain, but being successful in meeting business requirements across the full spectrum of multidomain MDM is a very different challenge. This vendor's strategy for multidomain MDM thus hinges on it being successful with MDM of customer data in the next 18 to 24 months. Some vendors acquire the missing technology and skills, but this vendor does not have the funds, nor are there many small MDM of customer data vendors left to be acquired in the market. So it seems the vendor will likely build out its current offering and hire some knowledgeable resources. This will take time, while vendors in that market are pushing ahead, so this is a long, high-risk strategy.
• Growth strategy contains some risk: Riversand is aggressively seeking to capitalize on its 2011 growth, but is likely introducing some risk in doing so. There are new resources in Europe, and new marketing, partnering and service leadership resources, too. The big challenge with fast growth strategies is to grow in a controlled manner and ensure little dilution of knowledge and reputation. The vendor also has big ideas for its partnering ecosystem — from implementation service partners through sales channels and technology partners. Its partnering strategy is almost as broad and expansive as those of the larger vendors in this market, and this can easily become a risk if (1) it does not deliver on the short-term promise, and (2) it therefore takes too much valuable senior management time and attention to "fix." Few vendors the size of Riversand achieve success with such a big vision — though there are some early signs that parts of the partner ecosystem are delivering some value.

SAP (MDG-M)

Website: www.sap.com

Headquarters: Walldorf, Germany

SAP's Enterprise MDM portfolio includes Master Data Governance (MDG) and NetWeaver MDM, and it plans to introduce a third product, Master Data Services (MDS), in 4Q12. These products are typically purchased as part of an Enterprise MDM bundle, and SAP Data Services and SAP Information Steward complement both NetWeaver MDM and MDG. MDG has been developed in-house within SAP, and it has finance, material, vendor and customer variants, with SAP MDG EhP6, including MDG for Material (MDG-M), becoming generally available in April 2011. Pricing metrics for MDG include data domain type, number of records and usage scenario. Top industries are manufacturing, distribution and consumer goods.

In this Magic Quadrant, we are evaluating MDG-M and NetWeaver MDM separately, as end-user organizations are faced with a choice between multiple SAP offerings that are positioned differently. Initially, MDG was positioned as an application-specific data stewardship application for managing application data in SAP's ERP application and was seen as complementing NetWeaver MDM. However, the majority of MDG deployments now also use it as a stand-alone MDM hub to create and maintain master data and other ERP data centrally.

Customer base of MDG-M (licensed to manage product data): estimated at 100.

Strengths

• Not just MDM but ERP data management: SAP MDG was designed to provide a single entry and control point for ERP data management and maintenance, which includes the master data used in SAP ERP. Gartner calls this an application-specific (in this case, ERP) data stewardship solution. SAP MDG's core data model is identical to SAP ERP Central Component (ECC). However, by implementing SAP MDG outside the ECC data model, and by extending the data model limiting the data physically stored to master data, SAP MDG can be deployed as if it were an MDM hub. So, with one solution, SAP is offering multiple new options to customers: co-deployed (sharing the same ECC data model/instance) to support SAP ERP data, and stand-alone (the same ECC data model or with extensions) to support SAP and/or non-SAP data.
• Strong momentum and focus: SAP finally has a native Advanced Business Application Programming (ABAP)-based solution focused on the problem of stewarding ERP data, which happens also to support an independent hub deployment, such that it can also support MDM (that is, application independency). As such, customers seem to be adopting SAP MDG far more quickly than new deals for SAP NetWeaver MDM are being made. MDG is therefore getting the majority of the attention in terms of sales and product development investment. Despite the confusion in the market about positioning, it seems clear that in the long term the focus will be on SAP MDG (and even SAP MDS beyond that, as SAP Hana evolves and matures).
• Better support for data stewardship: SAP Information Steward is already integrated with SAP MDG in that users can click on analytics and exception reports in Information Steward and access the right data in context within SAP MDG directly. The integration is not yet bidirectional — one cannot yet look at data in SAP MDG and, from there, click to Information Steward to validate that data's condition or status. However, even this early integration is more than what has been supplied to date with SAP NetWeaver MDM. There are also some new capabilities in MDG (not offered in NetWeaver MDM) that consume information on process status, which again will help the product data steward.
• Excellent integration with SAP's ERP application and technologies: MDG provides native integration with SAP ERP and leverages the SAP ERP Material data model, the ERP UI, and the existing ERP business logic and configuration for the creation and validation of ERP data, including master data. It also leverages SAP Data Services for data quality and data enrichment. In addition, it leverages SAP's Business Rules Framework (BRF+), and organizations can use Business Add-Ins (BAdIs) to include custom ABAP code into MDG's processes. Organizations can use SAP's Distributed Replication Framework (DRF) to distribute the master data, life cycle support is provided by SAP Solution Manager, and there is integration via Application Link Enabling (ALE) and NetWeaver Process Integration (but not with SAP NetWeaver BPM).

Cautions

• New product with many new requirements: SAP MDG has not yet been deployed widely, nor does it yet have experience with mastering non-SAP data. The product has been in GA for only two years, and it has not yet competed against many other MDM of product data solutions. Some of the capabilities in SAP NetWeaver MDM, such as those related to catalog management and business rules for multichannel e-commerce, will have to be developed if the product is to compete against best-of-breed solutions. Reference customers (see below) have also identified some early gaps in the product. While the product will appeal to SAP ECC customers that want to improve control of their ERP and related master data, the MDG product was not designed to govern the creation of master data across non-SAP applications out-of-the-box. It would need to be augmented with other workflow or BPM solutions. Its internal workflow capability works well within an ECC environment, but beyond that, there is less capability. MDG-M is not designed to support distributed authoring situations that require consolidation and harmonization of the data (unlike NetWeaver MDM and MDS), and it lacks sufficient or automated facilities for data loading and merging to maintain a golden record. As such, its road map has to "catch up" with SAP NetWeaver MDM before it can innovate with additional features.
• Small customer base will take time to equal SAP NetWeaver MDM base: Gartner estimates that SAP's revenue from SAP MDG-M amounts to 30% of its total revenue for MDM of product data (70% attributed to NetWeaver MDM). It will take some time, perhaps another two years, for the customer base using MDG-M to equal the customer base already established for SAP NetWeaver MDM. This will make producing references on the new product a challenge for a while, and effectively resets SAP's position in the market.
• Confusing marketing and positioning: Where once SAP positioned NetWeaver MDM as meeting all MDM of product data needs, it now positions the two products, NetWeaver MDM and MDG-M, based on different core technologies, for different parts of the market. NetWeaver MDM is now positioned for distributed authoring situations requiring data consolidation and harmonization, and MDG-M is now positioned not just as an application-specific data stewardship tool for ECC6, but also as a stand-alone MDM hub suitable for workflow-based central authoring in heterogeneous environments. The result is some confusion within the SAP customer base, as organizations try to work out which product or which combination of products will best meet their needs and what to do about their existing investments in NetWeaver MDM and associated workflow assets. SAP BPM is integrated today with SAP NetWeaver MDM (for end-to-end process orchestration) and not with SAP MDG; additionally SAP Information Steward, used by the product data steward to monitor and measure the status and quality of product data, works better with SAP MDG than with SAP NetWeaver MDM.
• Low number of references, and low reference scores in key areas: SAP identified only six reference customers for SAP MDG-M, and we achieved only a 50% response rate. SAP scored low for hierarchy management, data quality support, initial data load, and support for the information or enterprise architect. The product scored high in the areas of high availability and manageability/security.

SAP (NetWeaver MDM)

Website: www.sap.com

Headquarters: Walldorf, Germany

SAP's Enterprise MDM portfolio includes MDG and NetWeaver MDM, and it plans to introduce a third product, MDS, in 4Q12. The products are typically purchased as part of an Enterprise MDM bundle, and SAP Data Services and SAP Information Steward complement both NetWeaver MDM and MDG. Historically, NetWeaver MDM, which is based on technology from the A2i acquisition of July 2004, has been SAP's lead MDM offering, and it used to be positioned as a multidomain MDM solution that met all MDM requirements. The latest positioning from SAP is that SAP NetWeaver MDM is still a multidomain product for users wanting a consolidation approach (distributed data ownership), whereas SAP MDG is positioned as domain-specific where centralized data ownership is required. The latest version of NetWeaver MDM, v.7.1 SP08, has been generally available since October 2011. Top industries are manufacturing, consumer goods and distribution.

In this Magic Quadrant we are evaluating MDG and NetWeaver MDM separately as end-user organizations are faced with a choice between multiple offerings that are positioned differently. SAP NetWeaver MDM is now positioned as a multidomain MDM solution capable of consolidating and harmonizing master data where there is distributed authoring, though SAP NetWeaver MDM is no longer SAP's lead product for MDM. See also the preceding entry in this document on SAP (MDG-M).

Customer base of NetWeaver MDM (licensed to manage product data): estimated at 720.

Strengths

• Strong customer base: SAP has a large and loyal user base, particularly in product-oriented industries. Many of these organizations are looking for a single vendor to supply them with core business applications and application infrastructure, including MDM. SAP estimates that it has licensed NetWeaver MDM to over 1,700 customers, up from over 1,400 in mid-2011. It also claims that approximately 720 of those MDM customers are licensed to manage product data, though we estimate that only about 60% of its MDM customers (for all data domains) are actively engaged in implementation. We estimate that SAP had revenue of $75 million related to MDM of product data (out of a total MDM software revenue of $187 million) in 2011.
• Leverage of other SAP technologies: SAP has brought its various information management assets together under the EIM banner, and it sees NetWeaver MDM as a key part of that strategy. NetWeaver MDM is also one of the key orchestration technologies that enable both the mainstream, on-premises Business Suite applications and the newer, on-demand applications, such as Business ByDesign. NetWeaver MDM leverages other parts of the SAP EIM portfolio, such as Information Steward, which is designed to help organizations understand and analyze the trustworthiness of their information, and Data Services, a strong data quality tool, though not as proven in the product data quality space.
• Flexible multidomain MDM capability with mainly B2B experience: NetWeaver MDM has a flexible, domain-neutral data model, and a large number of multidomain references. The capability generally reflects the product's heritage, so it has good data model support for complex products, with business rules and workflow capabilities (though more advanced users rely more on SAP BPM for this). The product bundles the necessary add-ons for global data synchronization, if necessary.
• Developing support for effective data stewardship: SAP has leveraged other SAP technologies and standards, including some of those gained during the acquisition of Business Objects. For example, NetWeaver BPM, which includes the business rule engine, is leveraged to provide a sophisticated workflow capability for collaborative authoring and data stewardship. Also, users of NetWeaver MDM can generate Web-based data stewardship UIs for business users, using Web Dynpro generator, and not requiring the SAP Portal. There is integration with the Data Services matching engine, and users can leverage other SAP technologies for dashboarding and reporting (Information Steward) and data quality.

Cautions

• Confusing marketing and positioning: Where once SAP positioned NetWeaver MDM as meeting all MDM of product data needs, it now positions the two products, NetWeaver MDM and MDG-M, based on different core technologies, for different parts of the market. NetWeaver MDM is now positioned for distributed authoring situations requiring data consolidation and harmonization, and MDG-M is now positioned not just as an application-specific data stewardship tool for ECC6, but also as a stand-alone MDM hub suitable for workflow-based central authoring. The result is some confusion within the SAP customer base, as organizations try to work out which product or which combination of products will best meet their needs, and what to do about their existing investments in NetWeaver MDM and associated workflow assets. This is made more complex when non-SAP data is to be governed as well. SAP BPM integrates with SAP NetWeaver MDM (as users have attested), but does not with SAP MDG, and SAP has no plans for this at this time.
• Momentum shifting between products: SAP's sales momentum with SAP NetWeaver MDM is slowing, and we estimate that software revenue related to MDM of product data, using NetWeaver MDM, in 2011 was approximately $52 million, versus $66 million in 2010. This equates to approximately 720 end-user organizations implementing MDM of product data, though SAP claims many more licenses (over 1,000). The new growth in the MDM market is not focused on this product, but on the other SAP offering, SAP MDG.
• Low reference scores in key areas: SAP identified 14 reference customers for SAP NetWeaver MDM, and we were able to achieve a 71% response rate, which was just above average. Forty-four percent of users said they selected SAP without a competitive evaluation. Five of the responses were for SAP NetWeaver MDM. This product scored below average for "provides continuous flow of new features and innovations," "visibility to road map" and "responsive to requests for new features." Product capability scored low in the areas of workflow, monitoring and measuring data quality and consistency, and manageability/security.
• Product strategy growing more complex: Even with the growth in hype and interest in in-memory applications and data warehouses (SAP Hana), there is yet another MDM offering being developed, SAP MDS, though this is targeted at high-volume B2C MDM of customer data segments. As a result, a multidomain MDM strategy with SAP has become more complex. Additionally, many organizations focused on MDM also need to license additional offerings to support the MDM program, such as SAP Information Steward, which integrates differently with SAP NetWeaver MDM and SAP MDG. For more comprehensive, end-to-end process orchestration, SAP BPM would also be needed, but this is only integrated (so far) with SAP NetWeaver MDM. Overall, the range of offerings is quite effective when targeted at their niche (SAP ERP data), but the strategy has shifted significantly in a short time, and is now getting more complex. SAP Information Steward is also not yet mature and has yet to feature all the capabilities needed to support the data steward role.

Stibo Systems

Website: www.stibosystems.com

Headquarters: Arhus, Denmark

Stibo Systems sells Step, an MDM of product data offering. The latest release is Stibo Step 5.3.1 (GA in July 2012). Stibo Step comes in Standard (limited by server, named users, languages and numbers of objects stored) and Enterprise editions. There are additional charges when extending these licenses further. There is also an extensive set of optional modules, too long to list here. Its top industry segments are distribution, retail and manufacturing.

Customer base (licensed to manage product data): estimated at 190.

Strengths

• Robust core product capability: Step is a strong solution for MDM of product data. Its legacy is that it supported traditional print/publishing environments, common in distribution and manufacturing. This has been augmented with stronger data modeling capabilities, more packaged workflows, a supplier portal, and other optional modules such as for data quality and reporting. Workflow today is created using tables, though users can view the workflows in graphical format. The vendor has developed its own workflow capability, but Step can also be integrated with Intalio or Tibco BPM. The new data quality module, shipped in 2012, looks promising and is the foundation of a product information stewardship application.
• Strong packaged implementation services: Stibo, like many other smaller vendors, has struggled to unlock the potential that could take it to the next level. However, with the formalization of its implementation program (called Strategic Information Management [SIM]), the vendor has found one of the most important keys. From a user perspective, this makes buying Stibo's offering easier. The vendor demonstrates that it has thought about what does and does not work when implementing its offering. SIM makes it easier to implement, since many of the options and best practices and pitfalls are offered, followed or avoided respectively, and written down beforehand. Lastly, such a program helps the vendor in its partnering and growth strategy as it looks to offer more repeatable and sustainable business to its partners.
• Blue chip customer base: Stibo is developing an impressive array of well-known end-user customers that are starting to act as valuable references. Such success starts to breed further success. Additionally, the vendor has appeared in a notable number of "replacement" opportunities where it is playing an effective "spoiler" role for earlier generations of vendor implementation, where users desire a change. This is opening up new channels for the vendor, too. Stibo has focused on customer service to a great extent in the past, and this effort continues to pay off. Gartner estimates that Stibo has approximately 190 customers for its Step product, as of March 2012, and software revenue in 2011 of about $30 million.
• Sells well to business and broad market approach: Stibo works well in any MDM of product data scenario, and it sells well to business users. It can work well in multichannel commerce environments, with or without a central ERP system installed, and with or without a PLM solution. It operates as a central, multidomain hub supporting customer-facing or supplier-facing processes, as well as for nontraditional uses such as service data or asset data. As such, it can meet a wide range of requirements. Users have reported for some time that Stibo seems to present itself well to business users, and seems most at home talking about how it can solve business issues, and that it is less effective when it comes to the IT side of the conversation. Stibo's "bench" is strong, with many employees with long tenure, and this supports a credible, business-oriented message. This tends to mean that when Stibo gets to the demonstration round of a competitive deal, it does well.

Cautions

• Product strategy not bold enough: This Danish vendor is known for being modest in its sales and marketing claims; in a highly competitive market, this is not always the best strategy. Given its strong product and good customer service, it would likely grow faster if it were more visionary and forward thinking in its product strategy. It has been slow in addressing the needs of the data steward; and it has taken time to develop a vision for multidomain MDM. Long term, this vendor may start to lose out as other vendors, more aggressive in their road maps, start to bring to market better or more rounded solutions. Stibo will add, for example, a data stewardship solution only in 2013 — some two years after some other vendors have already shipped their first versions.
• Limited strategy for global support and partnerships: The vast majority of Stibo users use Stibo professional services for implementation. This has helped in building a strong reference base, but it has limited Stibo's ability to grow, since it was not an attractive partner for the larger external service providers (ESPs). Additionally, Stibo's sales were limited to where it could effectively locate and support its own staff. In 2012, the vendor has rounded out a formalized packaging of a standard implementation program that has all the traits to make it more attractive for ESPs to partner with, and take up the business of implementing, Stibo. Thanks to this, Stibo is now getting more visibility with the larger ESPs, and this bodes well for Stibo's global prospects, as well as Stibo's growth.
• Unclear marketing and messaging: Late in 2011 Stibo announced a new "tag line" — the Strategic Information Management company. What this meant, and its relationship to MDM, was not clear back then; it remains somewhat vague to anyone who has not sat down with the vendor to ask about the nature of that relationship. Primarily, the SIM name refers to the vendor's new packaged implementation strategy and support program (see above), so from that perspective, it is an effective name; however, given this is a product and technology vendor, the tag line ought to align with its product strategy. While SIM was being announced, the vendor also wanted to be known as a strong MDM of product data vendor, as well as a player in what it calls enterprise MDM (code for multidomain MDM), but this depends on a successful entry into the MDM of customer data market. This year and next are therefore a critical time for Stibo. It is likely (in our view) that the vendor will focus on growing its ESP partner business in 2012, and tackle its MDM of customer data strategy later in 2013, or even later.
• Does not sell well to IT: Users have reported over the past couple of years that Stibo does not work as effectively when selling to IT as when it is selling to business users. Its field resources tend to be very business-savvy, but when called on for detailed technical support and material, sometimes the field resources have to reach back to Denmark to get the documentation or answer. This has not proven fatal in a deal, but over the long term, this tends to lead to lower-than-average scores in many evaluations. When IT plays the role of "gatekeeper," a low score can be fatal in a deal, even if the business users prefer the UI. Stibo needs to "open up" its technology and add better support for its field organization.
• Low reference response rate and low scores in key areas: References have historically been a Strength for Stibo. In 2012, for the first time, they are a Caution. Stibo identified 25 reference customers (the second largest number of any vendor), but the response rate we achieved was only 28%, well below average. With only seven responses, it is hard to draw any meaningful conclusions from the data. However, it was noticeable that the vendor did score below average for TCO and pricing simplicity/transparency. Product gaps were reported in the workflow area, as well as reporting and analytics related to product data quality and status, though these users may not have licensed the new analytics or workflow module that the vendor added in 2011.

Tibco Software

Website: www.tibco.com

Headquarters: Palo Alto, California, U.S.

Tibco sells Tibco Collaborative Information Manager (CIM), which it positions as a multidomain MDM offering with best-of-breed MDM of product data capability. The latest release is Tibco CIM 8.2.1 (GA in December 2011). Tibco CIM is priced both per CPU and per named user, and both project-based and enterprise licenses are available. A single application license covers all data domains unless specifically restricted within the contract. Tibco's top industry segments are manufacturing, retail/distribution, telecommunications and financial services.

Customer base (licensed to manage product data): estimated at 150.

Strengths

• Substantial growth and momentum: Tibco's growth in 2010 was quite slow, but it accelerated in 2011 and into 2012. We estimate Tibco's total revenue for MDM was around $51 million in 2011, up from $22 million in 2010. Of this, $29 million was for MDM of product data, up from $13 million in 2010. This is impressive growth. We estimate the vendor has approximately 220 customers licensed for MDM, of which about 150 master product data. The vendor's share of the client inquiries received by Gartner in relation to this market segment grew from 4% to 8% in the year to March 2012 — see "Stay Up to Date With Changing Drivers and Challenges in the MDM of Product Data Market."
• Core product functionality: Tibco started out as a best-of-breed MDM of product data solution vendor; this is the vendor's heritage. It has good data modeling capabilities for complex products and supports effective business rule management as well as strong workflow, especially when its SOA suite is also part of the implementation (but it does not rely on this entirely to deliver those capabilities). The vendor has added CIM Accelerators for specific industries, including a preconfigured data model (from its experience in that industry) and taxonomy, with prebuilt workflows for specific business scenarios. These were added for telecommunications (others are yet to be published). Tibco is also known (judging from its reputation with reference customers) to support good performance and scalability for higher-volume messaging environments. The vendor has a wide range of proof points (that is, references) across the implementation styles (unlike most other vendors), excluding the registry style. It also has a wide range of batch and real-time integration customers.
• Business analytics in the MDM UI: The product ships with a runtime license for Spotfire prebuilt into the Tibco CIM product. This is a remarkable innovation that provides one of the most business-ready, business-meaningful UIs in the MDM market. The concept is brilliant: MDM does not need to start with a dialogue about data quality; it starts with (and should focus on) analytics that are meaningful to the business, with an underlying analysis of the data used to create and support the analytics or the process that generated it. As such, business users can identify what proportion of the data is putting their performance at risk. This is a most insightful approach to "how to manage data" and gives Tibco an edge when in front of business users.
• Flexible support for all MDM of product data scenarios and multidomain MDM: Tibco works well in any MDM of product data scenario. It can work well in multichannel commerce environments, with or without a central ERP system. It can work with or alongside a PLM solution, and support hierarchy management, as well as customer-facing and supplier-facing business processes. In addition, it can be used to master service data or asset data. As such, it can meet a wide range of requirements. Tibco is one of the few vendors that offers a single solution for all data domains. It is thus a capable multidomain vendor, although its strength lies in MDM of product data.

Cautions

• Passive product strategy: The vendor has, for too long, relied chiefly on its customers for the bulk of its road map. The vendor does sport some interesting innovations, but they have tended to evolve from customer requirements, and do not seem to emerge as part of a coordinated product strategy. Its "visual MDM" concept (which is unique in the market) remains underexploited, even though it could reinvent how MDM is perceived by users. Tibco has not effectively integrated its social software (Tibbr) into CIM, even though this could add some innovative support for program management for MDM implementations. It has a demo for a mobile extension to CIM, but this remains tactical and is not strongly promoted, despite the hype around mobile. Tibco is also talking about using CIM in the context of in memory data processing, as well as with big data — but these developments again appear disjointed and not orchestrated. This vendor has great assets, and good potential, but it is not organized to exploit them to their fullest.
• Lack of organizational focus on MDM and information governance: With a corporate focus on SOA and how its SOA platform can help meet the needs for real-time and big-data-based insight and analytics, one would think that there is a natural fit for "trusted information" in the overall platform. However, Tibco CIM remains generally "off to the side," and not part of the "main show." Tibco is well known in other markets related to SOA, but for some reason, it does not seem willing or able to develop a stronger information management or governance message, even though it has a strong MDM story to tell. The risk is that Tibco CIM loses out on executive time and attention as that critical resource becomes focused on other, broader issues and initiatives. The infrastructure-centric message also risks alienating the typical information management audience.
• Lack of a partnering program: The vendor partners more opportunistically with ESPs and does not maintain strong global partnerships for its MDM business. This might change if this part of the business continues to grow. However, this does leave customers at a slight disadvantage. Nearly 40% of its reference customers used ESPs and not its own professional services. Tibco is not a small vendor (overall) and often has relationships with partners for its SOA technology, so users may expect a stronger, more notable set of strategic partners for MDM. In fact, not having a couple of key partners working closely to extend and enrich the product for specific niches may hinder ongoing growth.
• Low reference scores in some key areas: Reference scores were pretty stable and suggest that Tibco is a good vendor to work with. Tibco identified 13 reference customers and we achieved a response rate of 92%, which was well above average. Tibco scored slightly below average for understanding industry needs, as well as pricing transparency and simplicity. Its product capability scored slightly below average for its UIs for stewardship and other roles.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

Agility Multichannel, IBM (InfoSphere MDM Advanced Edition), SAP (MDG-M).

Inclusion Criteria

For inclusion based on market traction and momentum, vendors should have:

• Generated at least $4 million in total software revenue (licenses and maintenance) related to MDM of product data solutions in the past four quarters
• Active sales and support activities globally — that is, in at least two of the following geographic regions: Americas, Europe and the Middle East, Africa, Asia and Australasia
• Active sales, support and customers in multiple industries

Though not part of the inclusion criteria, we also collect and/or estimate additional data to ascertain the level of activity and stability of each vendor in the market. This includes, but is not limited to:

• At least 12 live customer references for MDM of product data solution functionality
• At least eight new customers for MDM of product data solutions in the past four quarters
• Sufficient professional services to fulfill customer demand during the next six months
• Enough cash to fund a year of operations on current burn rate (specifically, companies spending their cash reserves if the year of operations is cash-flow-negative)

Multiple Products

Vendors may have multiple products in the MDM of product data solutions market; in these cases, each product will be evaluated separately against these inclusion criteria. The primary goal of our research is to deliver what will be most useful to our end-user clients in their decision making at the time of publication. In this regard, the number of dots in the Magic Quadrant is determined based on the inquiries and client interactions that our analysts undertake, plus their expert knowledge, and it aims to reflect what Gartner clients are seeing or experiencing and the decisions they are having to take.

On that basis, we have decided to provide multiple evaluations (and hence multiple dots) for IBM and SAP this year. Although IBM has an overall product offering called InfoSphere MDM within which the different technology bases are converging, the overall product is made up of multiple Editions, which have significant differences, and Gartner clients are having to make decisions about which Edition best meets their requirements. To aid that process, we have evaluated the InfoSphere MDM Advanced and Collaborative Editions separately, since both qualify for inclusion in this analysis. We have introduced a second dot for SAP as well. For many years, NetWeaver MDM had been SAP's only MDM product, but now we find that SAP MDG-M when deployed in stand-alone hub form is effectively an alternative to NetWeaver MDM, and we have an increasing number of clients trying to understand the relative positioning and capabilities. Lastly, there could have been a second dot for Oracle, as Oracle Fusion Product Hub is a separate product with a different positioning within the Oracle product line, but although it is generally available, it did not meet the revenue inclusion criteria for the Magic Quadrant this time.

Exclusion Criteria

This Magic Quadrant excludes:

• Vendors that solely focus on analytical (downstream) MDM requirements
• Vendors reselling another vendor's MDM of product data solution without extending the functionality
• Hosted services, marketing service providers or data providers that provide trusted reference data external to the enterprise, but that do not provide an MDM of product data solution that specifically meets the definition.

For MDM software vendors that are active in the MDM of product data solutions market, but have not met the inclusion criteria, see Note 3.

Reference Survey

As part of the Magic Quadrant process, we sought the views of vendors' reference customers via an online survey. The survey included requests for feedback on vendor maturity (for example, understanding industries, provision of innovation, responsiveness to new requests, TCO and pricing) and product capabilities (for example, flexibility in data modeling, support for data quality, UI support for data stewardship, internal workflow and support for multiple architectural styles). More than 100 organizations, representing all the featured vendors' reference bases, were contacted. Not surprisingly, the reference customers were generally pleased with their vendors and products, but they gave relatively low marks in some areas, which we have detailed in the analysis of each vendor. Some of the issues may be historical, as not all organizations are on the latest product versions.

MDM of Product Solutions Product Description

This market is characterized by packaged software solutions that bring together a range of technologies and capabilities that help sustain the idea of a single "golden record" for product master data. This is the primary focus of this market analysis. The range of functional capability included in these products includes:

1. Data modeling capabilities — The applicability of the data model to your organization is a fundamental requirement. It must:

• Model the complex relationships between the application sources inside the organization, its products and services, as well as intermediaries and other parties, with the ability to handle complex hierarchies.
• Map to the master product information requirements of the entire organization.
• Be configurable, customizable and extensible, but also upgradable.
• Support industry-specific requirements such as GS1 Global Data Dictionary, United Nations Standard Products and Services Code (UNSPSC), as well as multiple hierarchical and aggregated views associated with product and catalog structures related to channels, customers, partners, suppliers, other consumer systems and so on. This is particularly important across operational and analytical MDM requirements.
• Provide a base for the required workload mix and level of performance.
• Be expressed using commonly accepted logical data model conventions with associated metadata.

2. Information quality management capabilities — A good data model is of little value unless it contains accurate, up-to-date data for a product. The MDM of product data solution should:

• Have strong facilities, in batch and real-time mode, for profiling, cleansing, matching, linking, identifying, and semantically reconciling product master data in different data sources to create and maintain a "golden record." These facilities may be provided by the MDM of product data solution vendor or by offering tight integration with products from specialist data quality partners.
• Configure rules for comparing and reconciling semantics across data sources, matching and linking the data, and managing the merging and unmerging of records with support for full auditability, survivability and data lineage.
• Ensure that business rules and associated metadata related to data cleansing are sufficiently visible to satisfy compliance requirements.

3. Loading, integration and synchronization capabilities — The MDM of product data solution needs to provide facilities for loading the product data in a fast, efficient and accurate manner. There will also be a need for integration middleware, including publish and subscribe mechanisms, to provide a communication backbone for the bidirectional flow of product data between the central repository and the spoke systems, be they copies or subsets of the repository, or remote applications (coexistence style). These facilities may be provided by the MDM of product data solution vendor or by offering tight integration with products from specialist middleware partners. The MDM of product data solution should support, as necessary, the MDM implementation styles that each use loading, integration and synchronization in different ways, by being able to:

• Leverage a range of middleware products to data sources, including legacy data sources, and expose industry-standard interfaces.
• Support integration with different latency characteristics and styles (for example, real time and batch).
• Support integration with downstream BI and analytical requirements.

4. Business services and workflow functionality — Many organizations will plan to use the new product master database as the basis for new operational (both transaction and workflow-oriented) and analytical applications. In the SOA world of enterprise architecture, service-oriented composite business applications may consume MDM of product data solution business services through Web services standard interfaces. The MDM of product data solution should protect and complement the data layer with a layer of business services for accessing and manipulating the product data that is built for an SOA environment, and exposing Web services interfaces.

Additionally, many implementations of MDM focus not only on how systems interact (that is, transaction scenarios), but more on how business users collaborate in the authoring and management of master data. As such, the MDM of product data solution needs to support flexible and comprehensive workflow-based capabilities in order to model data services as well as user interaction across applications and data stores where master data is stored and used.

5. Performance, scalability and availability capabilities — If the MDM of product data solution supports operational and analytical applications and is tightly integrated with established systems and new applications, serious demands are likely to be made on its performance, scalability and availability. The MDM of product data solution should have:

• Proof points, preferably through live references, of different aspects of performance and scalability that match your current and future requirements.
• Appropriate availability characteristics regarding planned and unplanned downtime.

6. Manageability and security capabilities — This refers to the availability of facilities for the management and controlled access of the MDM of product data solution, such as facilities for reporting on activity in the MDM of product data solution. Facilities should also include the ability to integrate the MDM of product data solution with common system management and security tools.

On the security and data privacy management front, the solution should have the ability to:

• Manage the policies and rules associated with potentially complex privacy access rights.
• Configure and manage different rules of visibility, providing different views for different roles.

7. Stewardship Support and Services — The MDM of product data solution needs to support a range of capabilities for the day-to-day operation and management of MDM. The resulting focus will be the role of the (business-led) data steward. Among the different user roles that interact with MDM, the data steward requires a suitable UI, whereby these services are provided. These services will include, but not be limited to:

• Analytics and performance measures related to a range of processes and activities taking place within MDM, from the running of batch data loads, to the execution of workflows against benchmarks, to the data quality of active master data, to the business process benchmarks, to the business value provided by MDM.
• Status and management tools for the chief steward to monitor to-do lists of users to ensure effective action takes place across MDM.
• Systemwide master/meta models to help identify what users, roles, applications and systems are responsible for what master data, and the state of the master data and/or business rules that are generating exceptions in that data.
• Workflow services — to interrogate and provide revisions to current MDM workflows.
• Business rule services — to interrogate which rules are used by MDM and to provide suggested enhancements to such business rules; also to determine under which circumstances source preference is revised to give preference to the most dependable source.
• A range of user interfaces on PCs, smartphones and media tablets.

8. Technology and architecture considerations — MDM of product data solutions should be based on up-to-date, mainstream server, PC and mobile device technologies and be capable of flexible and effective integration with a wide range of other application and infrastructure platform components (whether from the same vendor or not) within end-user organizations.

An MDM of product data solution should be capable of:

• Flexible configuration into a range of implementation styles in terms of instantiation, latency and use of product master data to enable it to satisfy different use case scenarios, such as the consolidation, registry, coexistence and centralized scenarios.
• Architecturally supporting global rollouts and localized international installations.
• Supporting both on-premises and in-the-cloud deployment styles, including SaaS.
• Supporting integration with big data sources and performing entity resolution within those sources, whether they are relational or nonrelational and include structured or unstructured data.

Evaluation Criteria

Ability to Execute

Gartner analysts evaluate technology providers on the quality and efficacy of the processes, systems, methods and procedures that enable IT provider performance to be competitive, efficient and effective, and to positively impact revenue, retention and reputation. Ultimately, technology providers are judged on their ability and success in capitalizing on their vision.

Product

Software products offered by the vendor that compete in and serve the MDM of product data solution market. This includes product capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements and partnerships, as defined in the market definition and detailed in the subcriteria.

Vendors are measured on the ability of the product release to support the following MDM of product data solution subcriteria:

• Data modeling capabilities
• Information quality management capabilities
• Loading, integration and synchronization capabilities
• Business services and workflow functionality
• Performance, scalability and availability capabilities
• Manageability and security capabilities
• Stewardship support and services
• Technology and architectural considerations

Overall Viability

Viability includes an assessment of the MDM of product data solution vendor's financial health, the financial and practical success of the business unit or organization in generating business results in the MDM of product data solution market, on a global basis, and the likelihood of the organization or individual business unit continuing to invest in the development of the product, continuing to offer the product and advancing the state of the art within the organization's portfolio of products.

Sales Execution

The vendor's capabilities in all MDM of product data solution-related presales activities, on a global basis, and the structure that supports them. This includes deal management, pricing and negotiation, presales support and the overall effectiveness of the sales channel.

Market Responsiveness and Track Record

The ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve, and market dynamics change within the MDM of product data solution market. This criterion also considers the vendor's history of responsiveness.

Customer Experience

Relationships, products, services and programs that enable clients to be successful, on a global basis, with the products evaluated. This includes implementation and support and the way customers receive technical and account support. It also includes a measure of clients' success in implementing MDM for product data solutions — based on customer references and TCO.

With the increasing hype around multidomain MDM, we also look for demonstrated proof — via proof of concepts, customer evaluations or live implementations — of multidomain and multiprovince capability.

Operations

The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Source: Gartner (November 2012)

Completeness of Vision

Gartner analysts evaluate technology providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and how well these correspond to Gartner's position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunities.

Market Understanding

The ability of the vendor to understand buyers' needs and translate these needs into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance them with their added vision. Vendors should demonstrate a strategic understanding of MDM for product data solution opportunities (for example, new application functionality or customer segments) and ongoing vendor market dynamics (for example, consolidation trends) on a global basis, and translate this into products and services. Additionally, vendors should demonstrate an understanding of the wider implications and position of MDM for other kinds of master data within an organization's multidomain, multiuse case, and multi-implementation-style program. Understanding of the relationship to enterprise information architecture and EIM initiatives is valuable to customers taking a strategic view.

Marketing Strategy

A clear, differentiated set of MDM of product data solution messages consistently communicated throughout the organization and externalized globally through a website, advertising, customer programs and positioning statements. Intersection with multidomain MDM and wider MDM and industry challenges, as expressed by Gartner clients, is important.

Sales Strategy

The vendor's strategy for selling the MDM of product data solution that uses a global network of direct and indirect sales, marketing, service and communication affiliates to extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy

A vendor's approach to product development and delivery should emphasize differentiation, functionality, methodology, and feature set as they map to current and future requirements. The vendor's published "statement of direction" (or Gartner's understanding of it) for the next two product releases needs to keep pace with or surpass Gartner's vision of the MDM of product data solution market. Gartner's main product-oriented criteria focus on:

• Data modeling capabilities
• Information quality management capabilities
• Loading, integration and synchronization capabilities
• Business services and workflow functionality
• Performance, scalability and availability capabilities
• Manageability and security capabilities
• Stewardship support and services
• Technology and architectural considerations

The vendor needs to offer an MDM of product data solution that can be configured into a range of architectural styles, in terms of instantiation, latency, search and usage of product master data, to allow it to satisfy different use case scenarios, such as the consolidation-, registry- and centralized-style scenarios, leading up to hybrid models such as the coexistence style.

The vendor needs to show how an MDM of product data solution supports the wide range of user cases from business design (construction-centric MDM), business operations (operational MDM) and BI (analytical MDM). Most vendors focus on one use case, so vendors need to demonstrate how they intend to support the growing convergence in requirements across these use cases.

The vendor must also understand major technology/architecture shifts in the market and communicate a plan to leverage them, including migration issues that may affect customers on current releases. Specifically, the vendor should have a vision to support mainstream software infrastructure technology, as opposed to a proprietary stack, and have an evolutionary path toward SOA.

Business Model

The soundness and logic of an MDM of product data solution vendor's underlying business proposition. Vendors should have a well-articulated strategy for revenue growth and sustained profitability. Key elements of strategy include the sales and distribution plan, internal investment priority and timing, and partner alliances, such as those with external service providers.

Vertical/Industry Strategy

The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets. Included are reviews of the vendor's strategy for meeting needs in specific industries, such as banking, manufacturing, communications and government.

Innovation

Vendors need to be able to lead this market and, in so doing, provide customers with an innovative solution and approach to service customer needs in a complex, heterogeneous environment. Innovation here implies leading the way with MDM of product data issues today and in the future. Understanding of and support for the most complex and broadest set of MDM of product data environments and the growing requirements of multidomain and multi-use-case MDM in general is looked for. New this year is our focus on how the vendor plans to support key initiatives such as those relating to the cloud, social data, other kinds of big data and mobile technologies in the context of MDM.

Geographic Strategy

The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside its "home" or native geography, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market. Included are sales, marketing and support for complex global companies.

Source: Gartner (November 2012)

Quadrant Descriptions

Leaders

Leaders demonstrate strong results and delivery capabilities. They typically possess a large, satisfied customer base (relative to the size of the market) and enjoy high visibility in the market. Their size and financial strength enable them to remain viable in a challenging economy. Leaders have mature offerings and track records of successful deployments, even in the most challenging environments, across all geographies and in many industries. Leaders have the strategic vision to address evolving client requirements; however, they are not always the best choice.

Challengers

Challengers demonstrate a clear understanding of today's MDM of product data solution market, but they either have not demonstrated a clear understanding of its direction or are not well-positioned to capitalize on emerging trends. They often have a strong market presence in other application areas.

Visionaries

Visionaries display healthy innovation and a strong potential to influence the direction of the MDM of product data solution market, but they are limited in terms of execution or demonstrated track record. Typically, their products and market presence are not yet complete or established enough to merit Leader status.

Niche Players

Niche Players do well in specific segments of the MDM of product data solution market, or have limited ability to be innovative or outperform other vendors in the market. They may be focused on a specific functionality, domain or industry, or have gaps relative to broader functionality requirements. Niche Players may have limited implementation and support services, or they may not have achieved the necessary scale to solidify their market positions.

This Magic Quadrant provides insight into the portion of the packaged MDM solution market that focuses on how organizations master and share a "single version" of product data with multiple views of it across their operations. Achieving a single version of master data is a key initiative for many organizations, while "product" data here includes a range of "things," such as finished products, parts, assets, services, materials and financial instruments. This analysis positions MDM of product data solution vendors (and their products) on the basis of their Completeness of Vision relative to the market and their Ability to Execute on that vision.

The market remains dominated by best-of-breed solutions, including some acquired by large vendors more often associated with suite offerings. The largest three vendors in the market, SAP, Oracle and IBM, which account for nearly 50% of the market, each have different strategies. SAP's two current offerings are a best-of-breed offering (SAP NetWeaver MDM) that has since been repositioned as a suite offering for other data domains, and the newer SAP MDG, which was built as a multidomain MDM suite. Oracle has a suite-based strategy with its set of EBS-based hub solutions, some best-of-breed offerings for other data domains, and its newer Oracle Fusion MDM offering, which is more of a suite play. IBM takes a best-of-breed portfolio approach to product data (with its Collaborative Edition), but is increasingly trying to "merge" its three best-of-breed offerings into more of a platform.

The middle part of this market is made up of Tibco and Stibo. Both are strong best-of-breed-oriented vendors, and both have designs on a multidomain suite play for other domains. Tibco is further along in terms of building its capability for other domains, such as acquiring data quality and matching for MDM of customer data. The rest of the smaller vendors in this Magic Quadrant are a mixture of niche vendors with best-of-breed offerings (hybris, Enterworks, Heiler and Agility Multichannel), suite plays with best-of-breed capabilities (Riversand) or customer data capabilities (Informatica) or generalists for multidomain MDM (Orchestra Networks). The degree of specialization needed to meet complex requirements has meant that this market, and its sister market (MDM of customer data), remain dominated by best-of-breed MDM solutions. The more generalist, multidomain MDM suite does not show signs of dominating this segment (or the customer data segment) for at least another two years.

Use this Magic Quadrant to understand the MDM of product data solution market, and how Gartner rates the leading vendors (and their offerings) in this market. Draw on this research to evaluate vendors based on a set of objective criteria that you can adapt to your particular situation. Gartner advises organizations against simply selecting vendors in the Leaders quadrant. All selections are buyer-specific, and vendors from the Challengers, Niche Players or Visionaries quadrants could be better matches for your requirements. See "Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market."

Although important, selecting an MDM for product data solution is only part of the MDM challenge. To succeed, you should put together a balanced MDM program that creates a shared vision and strategy, addresses governance and organizational issues, leverages the appropriate technology and architecture, and creates the necessary processes and metrics for your customer data system (see "The Seven Building Blocks of MDM: A Framework for Success" and "The Five Vectors of Complexity That Define Your MDM Strategy"). You may also complete your MDM implementation with the necessary technologies emerging in the area of information stewardship (see "The Emergence of Information Stewardship Applications for Master Data").

MDM is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise's official, shared master data assets. Master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise, such as customers, prospects, citizens, suppliers, sites, hierarchies and chart of accounts.

The Need for a Single View of the Product

Many organizations of all sizes across many industries struggle to maintain a consistent, shareable and accurate single version of product or service data across their enterprises. Achieving and maintaining a single, semantically consistent version of product master data is a critical capability for any customer-centric organization. There are many factors affecting this market, including:

• The global economic climate is in a state of flux and some regions and/or industries are showing growth and/or large profits, while others are showing few signs of this.
• IT innovation continues apace in areas where organizational master data needs to relate, integrate or govern alongside the rapid growth and increased complexity observed outside the organization, including social data and big data (see "'Big Data' Is Only the Beginning of Extreme Information Management").
• The application legacy that is the bulwark of many organizations' core business processes is finally showing signs of "giving up" its hegemony over operational data that links such systems and business processes together. Information governance is really beginning to stand out alongside, but independent from, business applications and BI silos.

These dynamics impress more urgency on the business drivers for why organizations continue to seek real solutions to help sustain a single version of the truth for product data. These drivers span a predictable range:

• Increased revenue from additional sales efforts (upselling and cross-selling), once a better view of customers' products and services is established
• Reducing time to market and new product/service introduction
• Better multichannel integration and improved customer service (pre- or post-sales)
• Increased supply chain visibility and a simplified environment for increased multienterprise collaboration

For those few organizations that are beyond short-term growth cycles, additional drivers include innovation, business agility and a more agile business process orchestration.

Where Organizations Start Their MDM of Product Data Journey

The drivers listed above emerge in discrete parts of an organization:

• Customer-focused business processes and applications. The demands on vendors in this area continue in 2012. Some users of master product data (including those in specific industries like retail) try to use one solution (MDM of product data) to master product and customer data, which we refer to as MDM for multichannel e-commerce. Long term, this type of MDM solution will get subsumed into the future multidomain MDM market. This shift will take many years to achieve.
• Supplier-focused business processes. This is a far less mature segment than the sell side, which means that many organizations remain focused on embedding parts and product data within their procurement applications.
• Enterprise-out focused business process. This is a complex segment comprising at least two sets of business needs. One focuses on users seeking to master product hierarchy data in support of a data warehouse supporting analytics, reporting and decision making. The second set of needs starts with a more generalized multidomain MDM set of requirements, that includes product data, but perhaps not to the degree of complexity for all business applications supported. This latter set of needs would be oriented toward operational MDM, whereas the first would be oriented toward analytical MDM.

For a more complete explanation of where organizations are starting their MDM of product data journey, see "Consider Three Specific Scenarios for MDM of Product Data."

Market Growth Continues

Gartner estimates that total software revenue for MDM solutions was $1.5 billion in 2011, an increase of 15% from 2010. Within those overall figures we estimate that the market for MDM of product data solutions was $455 million. The growth in this segment is lower than the overall market growth of 15% and is nearer 8%. In "Forecast: Master Data Management, Worldwide, 2010-2015" we projected five-year compound annual growth rates (CAGRs) of nearly 20% for the overall MDM market and 9% for the MDM of product data software market through 2015. We estimate that SAP is the largest vendor in the MDM of product data solutions market (based on sales of SAP NetWeaver MDM and SAP MDG-M), with estimated total software revenue of $75 million. Oracle is in second place (based on sales of Oracle PDH), with estimated revenue of $73 million. IBM is in third place (based on sales of IBM InfoSphere MDM, Collaborative and Advanced Editions) with estimated total software revenue of $62 million.

How Vendors Are Evolving

The market for MDM of product data has reached a transition point that can be explained in terms of a generational model. The first generation of solutions that specialized in a particular data domain (some still in the market today — for example, Heiler's) and that characterized this market segment's emergence is now reasonably mature, with many examples of successful implementations. Their vendors were the early pioneers of MDM in their respective domains and industries, and they represent the majority of the implementations in this market segment.

A second generation of vendor and technology emerged that is characterized by a capability to use one vendor and/or technology to master several master data domains (mostly from the same province — for example, party or thing). This is analogous to a user organization initially mastering product data and then later using the same solution to master part, location, asset or account data, for example. These master data entities are said to be from the same province (specifically, they share similar sources of complexity that differ from customer, supplier, partner or citizen data, which are also from a different data province to product data). This was a relatively easy shift for some vendors at that time. Since 2011, some industry segments have focused on this generation of MDM tools specifically — retail, for example, with its focus on multichannel integration.

If the complexity of the data domain is such that a different vendor and technology is needed, implementation shifts from single-domain MDM to multiple-domain MDM (which means different vendor and product offerings for each data domain). This is the largest-growing segment in MDM today. A third generation of vendors and technologies emerged in 2010 and is characterized by a single technology solution that is used to model multiple or any number of domains from any province. This is "multidomain MDM" since it refers to one vendor and solution, spanning products and things, customers and parties, and hierarchies and reference data. This is the newest generation, which is gaining traction from a very small base. The few, early implementations of such solutions do not really support the complex aspects of both product and customer domains. Typically, a vendor solution was stronger in one domain (either customer or product) and was adapted to cater to one of the less complex requirements of the other province. Some vendors support multidomain MDM but with multiple products (so we would call that multiple-domain MDM).

Long term, the trend is clear. Over time, end users are looking to meet complex requirements with best-of-breed capabilities, but are beginning to trade this off against "good enough" capabilities for solutions that can master multiple domains, even considering multiple MDM solutions.