Magic Quadrant for Master Data Management of Product Data Solutions

6 November 2013 ID:G00251785
Analyst(s): Andrew White, Bill O'Kane

VIEW SUMMARY

The MDM of product data solutions market segment grew well in 2012, and the indications are that growth has continued in 2013. Customers will find that vendors' product strategies and vision have improved somewhat, but there remain opportunities for potentially market-leading innovations to emerge.

Market Definition/Description

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 a 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 a 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 this Magic Quadrant, although it may be reflected implicitly — for example, via placement of a vendor in the Niche Players quadrant.

Master data management (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.

MDM 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 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 of 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 organizations' 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

The use of MDM of product data solutions ranges across different scenarios. Some focus on a segment of product master and other application-specific data in support of customer-facing business processes commonly found in e-commerce across different or "omni" channels. Another scenario relates to supplier-facing procurement and development — that is, product life cycle management — business processes. Yet another takes a more enterprise- or ERP-centric view, starting with information architecture spanning all business processes and consolidation of data from a corporate, global perspective. For a more complete review of the scenarios covered by solutions in this Magic Quadrant, see "Consider Three Specific Scenarios for MDM of Product Data."

Organizations use MDM of product data solutions as part of an overall MDM strategy, which in itself should be part of a wider enterprise information management (EIM) strategy. An MDM strategy potentially encompasses the management of multiple master data domains, such as customer, product, asset, person or party, supplier and financial masters. As the name suggests, MDM of product data focuses on management of the domain relating to products, though the solutions can be used to govern other "thing"-type data, whereas MDM of customer data technology focuses on the domain relating to "party" data. Except for "Magic Quadrant for Master Data Management of Customer Data Solutions," there are no discrete Magic Quadrants for other master data domains due to the relatively low level of interest in discrete solutions to govern those data domains in comparison with the product and customer data domains.

We are routinely asked whether we have an overall MDM Magic Quadrant. We do not. We still believe that such a Magic Quadrant would be premature, because MDM needs are very diverse (see "The Five Vectors of Complexity That Define Your MDM Strategy"), leading to different market segments, and most evaluation and buying activity still focuses on initiatives for specific master data domains. In addition, although many MDM solutions are marketed as "multidomain MDM," they do not always conform to our definition of multidomain MDM technology (see Note 1) and we find that they have many gaps in their capabilities for, and experience of, handing every data domain (see "MDM Products Remain Immature in Managing Multiple Master Data Domains").

This Magic Quadrant provides insight into the segment of the constantly evolving packaged MDM system market that focuses on managing product data to support supply chain management (SCM), CRM and other customer-related strategies. 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.

Magic Quadrant

Figure 1. Magic Quadrant for Master Data Management of Product Data Solutions
Figure 1.Magic Quadrant for Master Data Management of Product Data Solutions

Source: Gartner (November 2013)

Vendor Strengths and Cautions

Agility Multichannel

Agility Multichannel (www.agilitymultichannel.com) is headquartered in York, U.K. The company's Agility version 5.2.06 achieved general availability (GA) in March 2013. Agility Multichannel's total MDM software revenue in 2012 (estimated) was $7.1 million. Agility Multichannel's total MDM customer count in March 2013 (estimated) was 70.

Strengths
  • Robust functionality: Agility Multichannel has good capabilities oriented toward multichannel e-commerce or product information management (PIM). Its road map shows some good UI ideas, such as a "sticky board" for "to do" items.
  • Market understanding: Agility Multichannel understands its chosen niche. It relates well to prospective customers, demonstrates a good understanding of the market and has broad industry experience.
  • Organizational stability: The management team is stable, finances appear stable and the company is self-funded. Its revenue rose by 24% in 2012, in comparison with the market segment's 9.3% rise, and much of this growth came from work with consulting partners. Agility Multichannel is an attractive vendor for small or midsize businesses (SMBs), for which its pricing and approach are well suited.
Cautions
  • Weak marketing: Agility Multichannel's share of the client inquiries received by Gartner in 2012 was only 0.5% of the total received in relation to this market segment. The company's share of this market segment, at approximately 1.4%, is higher than its inquiry share, which suggests it may find it challenging to add to its growth in 2013.
  • Product needs additional investment: The product needs additional investment in some areas to increase its competitiveness and fulfill the complex MDM requirements of some SMBs. These areas include business rules, multiple implementation styles and the emerging concept of information stewardship support.
  • Reference survey concerns: Although the product attracted a very good response rate to Gartner's survey (see Note 2), with many references submitted, it scored less well than other vendors in this Magic Quadrant in areas such as high availability, monitoring and reporting of product data quality, and support for multiple use cases.

Enterworks

Enterworks (www.enterworks.com) is headquartered in Sterling, Virginia, U.S. The company's Enable version 7.0 achieved GA in May 2013. Enterworks's total MDM software revenue in 2012 (estimated) was $13.2 million. Enterworks's total MDM customer count in March 2013 (estimated) was 210.

Strengths
  • Industry focus: Enterworks focuses on a narrow selection of industries — chiefly distribution and wholesale (70%) and manufacturing (20%). This enables it to concentrate its investments and time.
  • Targeted capability: Enterworks focuses on e-commerce across multiple channels, referred to as the "PIM scenario." It has effective workflow capabilities and, now, a more dynamic UI generated from the data model.
  • Key customers: Enterworks customers among Gartner's client base offered several very positive references that present effective and successful case studies.
Cautions
  • Lagging strategy: The product offers no packaged data stewardship support. Enterworks is developing new MDM-based business applications and diverting resources into adjacent market segments. It has little experience with multiple styles of MDM, and its data quality capability is not "best of breed." Enable 7.0 attracted below-average scores in the reference survey conducted in support of this analysis in the following areas: UI for information stewardship, internal workflow facilities, performance and scalability, monitoring, measurement and reporting of product data quality, and support for information architecture.
  • Little momentum and visibility: Enterworks's software revenue in this market segment increased by 2.9% in 2012, whereas the market segment's revenue grew by 9.3%. The vendor's share of inquiries to Gartner relating to this market segment was 1.6% in 2012, up from 0.3% in 2011, but below its 2012 market segment share of 2.7%.
  • Global strategy: Enterworks had planned to have direct resources in Europe in 2012, but these did not materialize. Prospective customers in EMEA will be served opportunistically with the help of partners — a strategy that does not promise strong growth.

hybris, an SAP Company

Hybris (www.hybris.com), an SAP company, is headquartered in Munich, Germany. The company's hybris Product Content Management (PCM) 5.0 achieved GA in March 2013. Hybris's total MDM software revenue in 2012 (estimated) was $20.3 million. Hybris's total MDM customer count in March 2013 (estimated) was 170. Hybris was acquired by SAP in August 2013.

Strengths
  • Strong momentum and focus: Hybris's revenue growth in this market segment was 19.6% in 2012, when the overall market segment's revenue growth was 9.3%. Hybris focuses on multichannel e-commerce requirements, though it does sell hybris PCM on a stand-alone basis.
  • Rounded product: Hybris targets multichannel e-commerce and PIM scenarios, as well as supporting content management. This is a good niche and PCM is an effective contender in this market segment. The product's UI, workflow and data modeling capabilities are good, and preconfigured workflows speed up implementation. Hybris has added optional in-memory support for MongoDB and Cassandra to help users with high-volume analytics needs.
Cautions
  • SAP's product strategy: SAP indicates that it will maintain hybris as a stand-alone unit, although there is an overlap in product capability. Better integration of shared metadata could help with information governance, but this is not on the company's road map.
  • Product and implementation capability: Gaps persist, such as the absence of information stewardship packaging. The product achieved lower scores in the reference survey than other vendors in this Magic Quadrant. Some reference customers reported an inability to find experienced external service provider (ESP) partners.
  • Marketing and visibility: Hybris's share of inquiries from Gartner clients in this market segment remained flat at 3.5% in 2012, which suggests that its revenue growth did not come from traditional channels and might have derived from noncompetitive selections. Its share of this market segment was 3.7%.

IBM (InfoSphere MDM Advanced Edition)

IBM (www.ibm.com) is headquartered in Armonk, New York, U.S. IBM's InfoSphere MDM Advanced Edition (AE) version 11 achieved GA in June 2013. IBM's total MDM software revenue in 2012 (estimated for all products and domains) was $311.6 million, of which $6.4 million was for AE for product data. IBM's total MDM customer count in March 2013 (estimated for all products and domains) was over 800, of which 30 were for AE for product data.

Strengths
  • Broad information management strategy: At IBM, MDM is central to a much broader big data and information management (IM) strategy and platform. This is attractive for large organizations looking for a wide range of IM capabilities from one vendor.
  • Product strategy: AE is the lead IBM product for multidomain MDM, with strengths in multiple MDM styles. IBM is delivering on the convergence of its legacy products into functional "editions." The included Master Data Governance facility has improving stewardship facilities, and IBM is building capabilities to link MDM and big data.
  • Targeted selling: This product meets the needs of complex and specific industries, such as financial services and retail.
Cautions
  • Slowing momentum: IBM's overall MDM software revenue growth slowed to an estimated 3.5% in 2012. Estimates suggest that revenue growth for this product slowed significantly in 2012, with a shift toward the Collaborative Edition (CE) and the Enterprise Edition (the latter includes both CE and AE).
  • Product capability: AE can help with initially less complex finished product/service-centric situations, but more complex workflow may require CE's capabilities.
  • References: IBM did not provide references for this product in this market segment, so we have relied on our inquiry data. This indicates that during the past year there has been little change in end users' perceptions of AE's strengths and weaknesses.

IBM (InfoSphere MDM Collaborative Edition)

IBM (www.ibm.com) is headquartered in Armonk, New York, U.S. IBM's InfoSphere MDM Collaborative Edition (CE) version 11 achieved GA in June 2013. IBM's total MDM software revenue in 2012 (estimated for all products and domains) was $311.6 million, of which $54.3 million was for CE. IBM's total MDM customer count in March 2013 (estimated for all products and domains) was over 800, of which 230 were for CE.

Strengths
  • Broad IM strategy: At IBM, MDM is central to a much broader big data and IM strategy and platform. This is attractive for large organizations looking for a wide range of IM capabilities from one vendor.
  • Product depth: CE has a very capable workflow and a flexible data model that can suit many situations. It includes data quality support for product data and a new UI for data stewards.
  • Strong references: The response rate to the survey conducted for this research was good, and CE achieved good scores in comparison to those received by other vendors in this Magic Quadrant.
Cautions
  • Slowing momentum: IBM's overall MDM software revenue growth slowed to an estimated 3.5% in 2012, although estimates suggest that revenue growth shifted toward this product in 2012. CE now represents 85% of IBM's software revenue from MDM of product data.
  • First-mover disadvantage: Some first-generation IBM installations are being switched to newer competitive offerings not because of any shortcoming in the product itself but because of end-user politics, changes in buying behavior and the complexity of IBM's recent marketing messages.
  • Complexity of road map: IBM's business process management system tools will not be rationalized with this product until 2015 or later. There is no single packaged solution for information stewards. No single metadata management workbench is planned until 2014 or later.

Informatica (Heiler)

Heiler (www.heiler.com), an Informatica company, is headquartered in Redwood City, California, U.S. Informatica Product Information Management (PIM) (formerly Heiler Enterprise PIM) version 7.0 achieved GA in April 2013. Heiler's total MDM software revenue in 2012 (estimated) was $12 million. Heiler's total MDM customer count in March 2013 (estimated) was 196. Heiler was acquired by Informatica in June 2013.

Strengths
  • Broad IM capability: Informatica has highly rated data quality and data integration tools, in addition to its multidomain MDM offering. Informatica PIM is positioned to manage product data supporting multichannel commerce.
  • Visibility/growth: This vendor's share of inquiries from Gartner clients in this market segment grew to over 7% in 2012, from under 3% the previous year. This is more than its market segment share of 1.5%. Estimates point to software revenue growth in this market segment of around 15%.
  • Organizational stability: Key resources from the Heiler acquisition will remain in a specialist role while operating within the overall Informatica organization. This will preserve valuable intellectual property (IP) relating to sell-side product data for multichannel commerce and buy-side supply chain scenarios.
Cautions
  • Product strategy: The vision shared thus far appears tactical and focused on the short-term integration of established products. There is, as yet, no firm strategic vision to merge and exploit the combined IP of Informatica's three MDM assets.
  • Protecting and exploiting IP: Informatica now has IP from three MDM entities and needs to exploit this. Heiler brings much-needed experience and knowledge about business processes, ERP and industry experience. This needs to drive Informatica's core MDM strategy.
  • References: The response rate was up on last year, but this product scored lower than other vendors in this Magic Quadrant in many categories.

Informatica (MDM)

Informatica (www.informatica.com) is headquartered in Redwood City, California, U.S. Informatica Master Data Management (MDM) version 9.6 achieved GA in June 2013. Informatica's total MDM software revenue in 2012 (estimated) was $85 million, of which $11 million was for product data. Informatica's total MDM customer count in March 2013 (estimated) was about 260; the vendor claims over 110 licenses for product data, but our estimates are for approximately 75 for system of record (versus system of reference).

Strengths
  • Broad IM capability: Informatica has highly rated data quality and data integration tools, in addition to its multidomain MDM offering. The multidomain product focuses on party data, but also handles other data, such as product data.
  • Product vision and messaging: This is slowly forming and showing signs of innovation and leadership. Informatica is shifting from a product to a platform focus, but this shift has only just begun in 2013. The vendor's recent redefinition of "universal MDM" is simpler and better, and should resonate with customers — once the reality catches up with the vision.
  • Partner ecosystem: Informatica's partner program is established mostly for party-type data, but it also has solid product data experience.
Cautions
  • Product Strategy: Informatica's vision is still emerging across its multiple MDM assets. Its short-term focus is API-level integration; this is a starting point that will drive short-term revenue. Additional acquisitions, such as Active Endpoints, will help at some point, but a broader workflow and process orchestration capability across the suite of products is needed, and there remain gaps, such as the lack of a single or shared metadata or semantic model. The vendor is working on these and other ideas. Informatica needs to transfer Heiler's IP to its core units and partners.
  • Reduced core-product momentum: Estimates for software revenue growth in this market segment in 2012 were below the market segment's average of 9.3%, at 6.9%. In this market segment, Informatica MDM's share of inquiries to Gartner slipped from 9.1% in 2011 to 8.7% in 2012.
  • Reference survey concerns: Although every reference customer for this product reported selecting it after a competitive process, it scored below the average in areas such as UI for data stewards, business services/integration and workflow capabilities.

Oracle (Product Hub)

Oracle (www.oracle.com) is headquartered in Redwood Shores, California, U.S. Oracle's Product Hub version 12.2 achieved GA in September 2013. Oracle's total MDM software revenue in 2012 (estimated) was $243 million, of which $80 million was for product data. Oracle's total MDM customer count (estimated for all solutions and domains) in March 2013 was 1,550, of which 460 were for product data.

Strengths
  • Strong MDM portfolio: Oracle has a broad range of MDM assets for multiple domains and use cases. Revenue growth for MDM of product data was 10% in 2012.
  • Strong product capability: Oracle Product Hub can be deployed "inside" the Oracle E-Business Suite (EBS) data model; alternatively, when "outside" EBS it can be deployed as an MDM hub, which can also govern non-EBS data. Innovations are emerging in relation to content management and e-commerce integration from acquisitions such as ATG and Endeca.
  • Evolving support for information stewardship: Users of Oracle Product Hub can draw on the Oracle Enterprise Data Quality platform to support important aspects of the role of product data steward, related to analytics and dashboards. Other tools in the Oracle middleware stack can be added to round out support for this role, such as those for metadata management and data lineage.
Cautions
  • Decreasing visibility: In this market segment, Oracle's share of inquiries to Gartner fell to 14.5% in 2012.
  • Unclear strategy: Oracle does not have a single-product strategy for MDM; instead, it takes a portfolio approach and will position different products based on specific customer scenarios. For Oracle EBS customers that want to embed its MDM data hub in the ERP instance, Oracle will position Oracle Product Hub. For other ERP systems, as well as cloud situations, Oracle might position Oracle Fusion Product Hub. Investments for product innovation may therefore need repeating on two products. The evolution of stewardship also needs to be aligned to different products, since each offers a different set of capabilities. Several Gartner clients considering Oracle have reported how different Oracle sales teams promote different products to the same prospective customer.
  • No stewardship packaging: Oracle offers a set of tools that is not aligned across MDM offerings and not yet unified into an MDM-neutral or packaged solution.
  • Customer concerns: Several Oracle customers reported challenges with some aspects of integration between Oracle MDM and other Oracle applications, or overly complex efforts to accomplish this.

Orchestra Networks

Orchestra Networks (www.orchestranetworks.com, www.smartdatagovernance.com) is headquartered in Paris, France. Orchestra's EBX5 version 5.4 achieved GA in October 2013. Orchestra's total MDM software revenue in 2012 (estimated) was $10.7 million, of which $5.4 million was for product data. Orchestra's total MDM customer count in March 2013 (estimated) was 90, of which 60 were for product data.

Strengths
  • Strong momentum: In 2012, Orchestra's revenue grew by over 22% in this market segment, in which it targets multidomain and enterprise scenarios more than e-commerce/multichannel or PIM scenarios.
  • Multidomain focus: Some customers report using EBX5 initially for product or service data, and then adding other domains. When the data model and workflow requirements are not complex or business-centric, EBX5 offers a good multidomain path for growth.
  • Product flexibility: EBX5 has deep experience with reference data and hierarchy management, and is used across the financial services and manufacturing sectors. It offers flexible data modeling, is integration/message-oriented, and has a cloud-based option.
Cautions
  • Narrow marketing strategy: By targeting niche scenarios, Orchestra has implicitly ceded mainstream implementations to competitors, when its offering should be quite attractive in these areas. In this market segment, Orchestra's share of inquiries to Gartner fell slightly in 2012, to 3.5%.
  • Product/partner strategy: Orchestra needs to develop starter templates, such as data models, to compete with larger rivals. This requires a mature partnership model; so far, Orchestra has partnered on an opportunistic basis.
  • References: Orchestra attracted a very low response rate to the survey Gartner conducted for this Magic Quadrant. Judging from inquiries from end users, the product's capabilities are considered below average.

Riversand

Riversand (www.riversand.com) is headquartered in Houston, Texas, U.S. Riversand's MDMCenter version 7.4 achieved GA in May 2013. Riversand's total MDM software revenue in 2012 (estimated) was $16.9 million. Riversand's total MDM customer count in March 2013 (estimated) was 50.

Strengths
  • Strong momentum: Riversand's software revenue in this market segment grew by over 40% in 2012, to $17 million. The market segment average rise was just over 9%.
  • Product strategy: We believe that Riversand has the industry's first in-memory solution in production. MDMCenter has multidomain capabilities with strong product data orientation, solid metadata management and flexible data modeling.
  • References and customer base: Riversand has broad exposure and experience in the retail, manufacturing, distribution and energy sectors. It achieved an above-average response rate in the survey conducted for this Magic Quadrant.
  • Solid partner program: Riversand depends heavily on partners for lead revenue, services and complementary technology. It has the most comprehensive partner strategy in this market segment.
Cautions
  • Lagging product capability: Riversand's data quality strategy is still not competitive, especially in terms of a multidomain approach. It has no solutions for data profiling and no packaging to support stewardship.
  • Marketing in transition: Riversand is emerging from a year of transition. It has simplified its message and positioning, and deployed a new website. In this market segment, its share of inquiries to Gartner dropped to 7.4% in 2012.
  • Growing pains: Riversand's head count has grown by almost 40% in two years. Prospective customers have reported some operational "disengagement." Riversand needs to support operational execution better, and hire and manage staff more effectively.

SAP (MDG-M)

SAP (www.sap.com) is headquartered in Walldorf, Germany. SAP's Master Data Governance for Material (MDG-M) version 6.1 achieved GA in December 2012. SAP's total MDM software revenue in 2012 (estimated) was $80 million, of which $40 million was for SAP MDG-M as a stand-alone hub. SAP's total MDM customer count in March 2013 (estimated for all products and domains) was 2,300 licenses, of which 1,600 were for product data, and approximately 60% of those were actively implementing or implemented.

Strengths
  • Broad portfolio: SAP sells NetWeaver MDM for consolidation, MDG for centralization and Information Steward for stewardship support. MDG Enterprise Edition is planned for Hana-based product data in 2014.
  • Product fit and flexibility: MDG-M is Advanced Business Application Programming (ABAP)-based, unlike NetWeaver MDM. Users can support ERP data management by implementing MDG "inside" SAP ERP Central Component (ECC) or "outside" (but integrated with) ECC as an MDM hub, extending the data model for non-SAP data.
  • Momentum within client base: The share of SAP's product data MDM sales attributed to MDG-M shifted little from 2011 to 2012. The largest (and increasing) share for MDG-M is as an MDM hub, as opposed to directly against an ERP system.
Cautions
  • Sold primarily to SAP's ERP installed base: MDG-M is not sold as a stand-alone or best-of-breed MDM offering. This is a self-imposed, niche-market approach.
  • Complex strategy: SAP MDG-M is positioned for ERP data, and SAP NetWeaver for master data outside SAP ECC. Together with customer-reported fluctuations in SAP's messaging, this has led to confusion in the market. MDG Enterprise Edition (Hana-based) is the strategic platform. Information Steward provides data stewardship support not included in SAP MDG.
  • Slowing momentum: SAP's estimated software revenue in this market segment grew by 7.7% in 2012, whereas the overall market segment grew by just over 9%. In this segment, SAP's share of inquiries to Gartner fell to 25.1% in 2012, from 30.4% the previous year.

SAP (NetWeaver MDM)

SAP (www.sap.com) is headquartered in Walldorf, Germany. SAP's NetWeaver Master Data Management (MDM) version 7.1 SP10 achieved GA in March 2013. SAP's total MDM software revenue in 2012 (estimated) was $80 million, of which $30 million was for SAP NetWeaver MDM for product data. SAP's total MDM customer count in March 2013 (estimated for all products and domains) was 2,300 licenses, of which 1,600 were for product data, and approximately 60% of those were actively implementing or implemented.

Strengths
  • Broad portfolio: SAP sells NetWeaver MDM for consolidation, MDG for centralization and Information Steward for stewardship support. MDG Enterprise Edition is planned for Hana-based product data in 2014.
  • Product capability and flexibility: NetWeaver MDM has good capabilities for central authoring of product master and application data. It offers integration with SAP BPM for orchestration, an in-memory search capability for high-volume searching, and a solid prepackaged data model.
  • Deep business process knowledge: SAP has expertise in the primary business processes driving an organization and a rich understanding of industry nuances — a key differentiator. SAP offers industry extensions for programs such as the Global Data Synchronization Network (GDSN), specific to the consumer packaged goods and retail sectors.
Cautions
  • Product weaknesses: NetWeaver MDM has proven difficult for some users due to its architecture: more than a few users updating the data store at the same time can lock the system, unless significant customization is undertaken. The product is designed to handle only some scenarios, and is not positioned to tackle centralized authoring of product data.
  • Complex strategy: SAP MDG-M is positioned for ERP data, and SAP NetWeaver for master data outside SAP ECC. Together with customer-reported fluctuations in messaging, this has led to confusion in the market. MDG Enterprise Edition (Hana-based) is the strategic platform. Information Steward provides data stewardship support not included in SAP NetWeaver MDM.
  • Market momentum: SAP's estimated software revenue in this market segment grew by 7.7% in 2012, to $80.6 million. In this segment, SAP's share of inquiries to Gartner fell to 25.1% in 2012, from 30.4% the previous year. We estimate that revenue from NetWeaver MDM fell in 2012 due to SAP's enthusiasm for MDG, from 70% of its overall MDM software sales in 2011 to 40%.
  • Reference survey concerns: Reference customers awarded lower scores to NetWeaver MDM than to other vendors in this Magic Quadrant in areas such as support for product data quality, UI for data stewardship, internal workflow capabilities, and monitoring, measuring and reporting the status of master data quality.

Stibo Systems

Stibo Systems (www.stibosystems.com) is headquartered in Aarhus, Denmark. Stibo's Step version 6.0 achieved GA in November 2012. Stibo's total MDM software revenue in 2012 (estimated) was $39.3 million. Stibo's total MDM customer count in March 2013 (estimated) was over 200.

Strengths
  • Strong momentum: Stibo's estimated software revenue in this market segment grew by over 30% in 2012 to give it the fourth-largest share of this segment. Stibo has depth in the distribution, retail and manufacturing sectors.
  • Increasing visibility: Stibo's share of inquiries to Gartner grew to 10.6% in 2012, from 7.2% the previous year, and the company's messaging became more cohesive. Step's reference scores were above average for vendors in this Magic Quadrant.
  • Solid product and strategy: Step has strong capabilities for multichannel e-commerce, but can handle all MDM of product data scenarios. Stibo has an emerging focus on multidomain MDM. It has its own workflow capability, which is maturing.
Cautions
  • Growing pains: Stibo is only just beginning to work with ESPs. Packaging their implementation templates and best practices has helped, but Stibo's execution is still emerging. The company's head count has grown by almost 40% in two years; it may face challenges if its new staff prove less effective than its original personnel.
  • Lack of scalability: Some clients report challenges with high-volume processing, issues with Step's packaged data integration and problems with documentation.
  • Product strategy and capability: Stibo has no packaged offering for information stewards, just a set of tools. A new data quality module has seen slow adoption. Step can use MongoDB as a "proxy" in support of its core database, but Stibo has no in-memory solution on its road map.

Tibco Software

Tibco Software (www.tibco.com) is headquartered in Palo Alto, California, U.S. Tibco's MDM version 8.3 achieved GA in March 2013. Tibco's MDM software revenue in 2012 (estimated) was $52.8 million, of which $30.8 million was for product data. Tibco's total MDM customer count in March 2013 (estimated) was 270, of which 180 were for product data.

Strengths
  • Strong momentum: Tibco's revenue in this market segment grew by an estimated 25% in 2012 as the company continued to capitalize on its data integration base. Its share of inquiries to Gartner increased from 8.2% in 2011 to 10.3% in 2012. A growing number of Tibco customers across multiple industries are moving beyond one implementation or domain.
  • Improved marketing: After a few years, Tibco has made a number of improvements to its marketing: new MDM content on its website; a change of product name; marketing of visual MDM, which is now being used; and effective communications about the combination of multidomain MDM and a best-of-breed product data solution.
  • Product strategy: Tibco has solid multidomain and data modeling capabilities; visual MDM is a differentiating feature for data quality reporting with a Spotfire runtime license; Tibco's in-memory caching and use of tibbr for internal "social MDM" and governance are attractive.
  • Reference scores: Tibco's product received higher scores than other vendors in this Magic Quadrant for availability, hierarchy management and support for multiple use cases.
Cautions
  • Emphasis on IT aspect: Reference customers and users of Gartner's client inquiry service report an IT-focused sales and implementation process, with little attention paid to the business ownership aspects of MDM programs. Tibco will need to engage business stakeholders effectively to remain competitive.
  • Lagging capabilities: Tibco still has no packaged solution for data stewardship.

Vendors Added and 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. It 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

None.

Dropped

None.

Inclusion and Exclusion Criteria

Inclusion Criteria

For inclusion in this Magic Quadrant, vendors were required to have:

  • Generated at least $4 million in total software revenue (licenses and maintenance) related to MDM of product data solutions, primarily supporting operational business processes, in the prior calendar year
  • Active sales and support activities globally — that is, in at least two of the following regions: Americas, Europe, the Middle East and Africa, Asia and Australasia
  • Active sales, support and customers in multiple industries

We also collect and/or estimate additional data to ascertain the level of activity and stability of each vendor in the market, though not as part of the inclusion criteria. We looked for:

  • 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 prior calendar year
  • Sufficient professional services to fulfill customer demand during the next six months
  • Enough cash to fund a year of operations at the current "burn rate" (companies spend their cash reserves if a year of operations is cash-flow-negative)

Multiple Products

Vendors may have multiple products in the MDM of product data solutions market. Where end users report a notable difference between them, each product is evaluated separately against these inclusion criteria.

On this basis, the following vendors offer multiple products that are evaluated separately:

  • IBM: two products, both qualified and included in the analysis
  • Informatica: two products, both qualified and included in the analysis
  • SAP: two products, both qualified and included in the analysis, in addition to a third product from hybris which is analyzed separately

The following vendors offer multiple products, but some of these products did not qualify for inclusion and are therefore not analyzed other than from the perspective of being of strategic importance to a vendor's MDM product strategy:

  • Oracle: Fusion Product Hub failed to meet the qualifying threshold for software revenue sales; however, Oracle's Product Hub did qualify and is included in the analysis.

Exclusion Criteria

This Magic Quadrant excludes the following because they are either tangential to the main focus of MDM programs (mastering data within an organization) or so new that they have yet to affect on-premises MDM deployments:

  • Vendors that focus solely on analytical (downstream) MDM requirements. We use only revenue from operational MDM installations for qualification, since this is where the bulk of MDM effort goes.
  • Vendors reselling another vendor's MDM of product data solution without extending its functionality. Likewise, royalties from an OEM or resale by another vendor are not credited to the provider of the OEM technology; original software revenue from the end-user acquisition is credited to the reselling vendor.
  • Hosted and cloud-based services, marketing service providers and data providers that provide trusted reference data external to the enterprise but do not provide an MDM of product data solution that specifically meets Gartner's definition.

MDM of Product Data Solution 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 analysis. The range of functional capabilities included in these products includes:

  • 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 and its products and services, as well as with 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 and 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.
    • Manage data, business rules, sources, ownership and so on for data governed by the MDM program using flexible, dynamic and business-consumable metadata management capabilities.
  • Information quality management/semantic capabilities — A good data model is of little value unless it contains accurate, up-to-date and semantically consistent data for a customer. The MDM of product data solution should:
    • Have strong facilities, in batch and real-time modes, 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 business and data rules for comparing, reconciling and enforcing 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 is sufficiently visible to satisfy compliance requirements.
  • Business services, integration and synchronization capabilities — The MDM of product data solution needs to provide facilities for loading 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). Many organizations will also plan to use the new product master database as the basis for new operational (both transaction and workflow-oriented) and analytical applications. In the service-oriented architecture (SOA) world of enterprise architecture, service-oriented composite business applications may consume MDM of product data solution business services through Web services' standard interfaces.
  • These facilities may be provided by the MDM of product data solution vendor or through tight integration with products from specialist middleware partners. The MDM of product data solution should support, as necessary, the MDM implementation styles, which each use loading, integration and synchronization in different ways, by being able to:
    • Leverage a range of middleware products to connect 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 business intelligence and analytical requirements
    • Support flexible and comprehensive business-services-based capability in order to model data services as well as user interactions across applications and data stores where master data is stored and used
  • Business process management (BPM) and workflow design and management capabilities — Product master data will permeate a range of business applications across systems and geographies. Successful MDM programs require a strong, business-outcome-driven process understanding of where and when master data is required in order to ensure the integrity of business processes. MDM of product data solutions do not need to include BPMS technology, but they do need to interoperate with third-party BPMS solutions in order for their stewardship (enforcement) and integration (services) capabilities to be consumed in actual business process orchestrations. A suggested range of necessary capabilities includes ones to:
    • Model, consider or recognize a business process model at a conceptual, logical and physical level in order to identify a conceptual, logical and physical data model in support of the same
    • Document and understand — that is, diagnose — the flow of master data across business systems, applications and processes
    • Design, orchestrate and manage a business-level and data-level workflow between any MDM hub and business systems that subscribe to the necessary information infrastructure
    • Support analytics, key performance indicators and benchmarking for an "as is" version of business processes and their outcomes, as well as workflows within them; also, to support a "to be" version for business process and data models
  • Performance, scalability, availability and security 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
    • On the security and data privacy management front — 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
  • Stewardship support and services — The MDM of product data solution needs to support a range of capabilities, from information policy evaluation through to the day-to-day operation and management of MDM. Governance roles focus on policy setting, steward roles on policy enforcement. The resulting focus of this functionality will be the role of the (business-led) data steward and governance roles. Among the different user roles that interact with MDM, the data steward and governance roles require a suitable UI whereby these services are provided. These services will include, but not be limited to:
    • Design and impact assessment of information policy pertaining to business or systemwide authority for data.
    • Analytics and performance measures related to a range of processes and activities taking place within MDM, from running batch data loads to executing workflows against benchmarks, assessing the quality of active master data, running business process benchmarks, and measuring the business value provided by MDM.
    • Status and management tools for the steward and governance roles to monitor to-do lists of users to ensure effective action takes place across the MDM landscape.
    • Systemwide master/meta models to help identify which users, roles, applications and systems are responsible for which 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 rules services to interrogate which rules are used by MDM and provide suggested enhancements to such business rules; these are also used to determine under which circumstances source preference is revised to give preference to the most dependable source.
    • Full, business-consumable audit trail information to identify past changes to information.
    • A range of user interfaces on PCs, smartphones and tablets.
  • 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 customer 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 cloud deployment styles, including SaaS
    • Supporting integration with big data sources, such as social networks, and performing entity resolution within those sources, whether relational or nonrelational, and whether data is structured or unstructured

Evaluation Criteria

Ability to Execute

Gartner analysts evaluate technology providers on the quality and efficacy of the processes, systems, methods or procedures that enable IT providers' 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 or Service: Software products offered by the vendor that compete in/serve the MDM of product data solutions market segment. 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 their products to support the following MDM of product data solution subcriteria:

  • Data modeling capabilities
  • Information quality and semantic capabilities
  • Business services, integration and synchronization
  • Workflow and BPM capabilities
  • Performance, scalability, security and availability 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 solutions market segment on a global basis, and the likelihood that the organization or individual business unit will continue to invest in development of the product, offer the product and advance the state of the art within the organization's product portfolio.

Sales Execution: A vendor's capabilities in all MDM of product data solutions-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: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customers' needs evolve and market dynamics change within the MDM of product data solutions market segment. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the vendor's message on a global basis, in order to influence the MDM of product data solutions market segment, promote the vendor's brand and business, increase awareness of its products, and establish a positive identification with its product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/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 measures of clients' success in implementing MDM for product data solutions: customer references and total cost of ownership (TCO).

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

Operations: The provider's ability 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. This criterion was not explicitly rated, but was rolled into the Overall Viability, Sales Execution/Pricing and Marketing Execution criteria.

Table 1. Ability to Execute Evaluation Criteria

Criteria

Weight

Product or Service

High

Overall Viability

High

Sales Execution/Pricing

High

Market Responsiveness/Record

High

Marketing Execution

High

Customer Experience

High

Operations

Low

Source: Gartner (November 2013)

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 they map to Gartner's position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunity for the provider.

Market Understanding: A vendor's ability to understand buyers' needs and translate these needs into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those wants 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 that understanding into products and services. Additionally, we consider a vendor's understanding of the wider implications of, and the position of MDM in relation to, other kinds of master data within an organization's multidomain, multiuse case and multi-implementation style program; an understanding of the relationship to enterprise information architecture and EIM initiatives is also valuable for 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: A vendor's strategy for selling an MDM of product data solution that uses its, or a partner's, global network of direct and indirect sales, marketing, service and communication affiliates to extend the scope and depth of its market reach, skills, expertise, technologies, services and customer base.

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

  • Data modeling capabilities
  • Information quality and semantic capabilities
  • Business services, integration and synchronization
  • Workflow and BPM capabilities
  • Performance, scalability, security and availability capabilities
  • Stewardship support and services
  • Technology and architectural considerations

Each 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 customer master data, to enable it to satisfy different use case scenarios, such as the consolidation, registry and centralized style scenarios, and leading to hybrid models such as the coexistence style.

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

Each vendor must also understand major technological and architectural 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 with ESPs.

Vertical/Industry Strategy: A vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including industries. Included are reviews of the vendor's strategy for meeting the needs of 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 meet customers' needs in a complex, heterogeneous environment. Innovation implies leading the way with MDM of product data issues both today and in the future. We looked for understanding of, and support for, the most complex and broadest MDM of product data environments and the growing requirements of multidomain and multi-use-case MDM in general. New this year is a focus on how vendors plan to support key initiatives such as the cloud, social data and other kinds of big data, and mobile communications in the context of MDM.

Geographic Strategy: A vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside its native geography, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market. This includes sales, marketing and support for complex global companies.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

High

Sales Strategy

Medium

Offering (Product) Strategy

High

Business Model

Medium

Vertical/Industry Strategy

High

Innovation

High

Geographic Strategy

Medium

Source: Gartner (November 2013)

Quadrant Descriptions

Leaders

Vendors in the Leaders quadrant have strong results and strong delivery capabilities, and will continue to have them. 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 solutions market segment, but they have either not demonstrated a clear understanding of the market's direction or are not well-positioned to capitalize on emerging trends. They often have a strong market presence in other application areas.

There are no Challengers in 2013's Magic Quadrant. The MDM of product data solutions market segment is increasingly being impacted by the gradual formation of requirements centered on multidomain MDM — in other words, single solutions that can be used for any number of data domains. This influence was very slight five years ago. Every year it has increased, however, and as a result the positions of vendors in this year's Magic Quadrant have been "elongated" from lower left to upper right in Figure 1. Assuming the multidomain MDM market emerges, the MDM of product data solutions market segment may no longer need to meet those multidomain requirements, so the requirements of future issues of this Magic Quadrant may focus more on the single domain, in which case the positions of the vendors in Figure 1 are likely to spread out. The effect of the current level of ancillary interest in multidomain capabilities by users of MDM of product data solutions can be seen in this year's Magic Quadrant reference survey, where 41% of respondents voiced interest in nonproduct domains, but only 17.9% actually formally evaluated those capabilities prior to purchase.

Visionaries

Visionaries display healthy innovation and a strong potential to influence the direction of the MDM of product data solutions market segment, but they are limited in execution or demonstrated track records. 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 solutions market segment, or have a limited ability to be innovative or outperform other vendors in this segment. They may be focused on a specific functionality, domain or industry, or have gaps in relation to broader functionality requirements. Niche Players may have limited implementation and support services, or they may not have achieved the scale necessary to solidify their market positions.

Context

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. In this Magic Quadrant "product data" 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 offerings) on the basis of their Completeness of Vision relative to the market segment, and their Ability to Execute on that vision.

Use this Magic Quadrant to understand the MDM of product data solutions market segment, and how Gartner rates the vendors (and their offerings) in this segment. Study this research to evaluate vendors by 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 should be buyer-specific, so vendors from the Challengers, Niche Players and Visionaries quadrants might be better matches for your requirements. For more information, see "How Gartner Evaluates Vendors and Markets in Magic Quadrants and MarketScopes."

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, uses appropriate technology and architecture, and creates the necessary processes and metrics for your product data system (see "The Seven Building Blocks of MDM: A Framework for Success" and "The Five Vectors of Complexity That Define Your MDM Strategy").

Market Overview

The Need for a Single View of the Product

Businesses of all sizes and in many industries struggle to maintain a consistent, shareable and accurate single version of product or service data across their organizations. The ability to achieve and maintain a single, semantically consistent version of product master data is crucial for any customer-centric organization.

Many factors affect this market segment. They include:

  • The global economic climate, which is in a state of flux. Some regions and industries are showing growth and large profits, while others are showing few signs of either.
  • IT innovation, which continues apace as information is tested (again) by its position at the center of a nexus of other forces — mobile-, cloud- and social-related — that place ever more demands on data, its use, reuse and governance. This is pushing MDM beyond its established boundaries as some end users look to shift the focus of their MDM programs from truth (that is, a "single version of the truth") to trust (differing degrees of which will alter the risk management approach to uses of this data).
  • Signs that the "legacy" applications that bulk large in many organizations' core business processes are finally losing their hegemony over the operational data that links them and their associated business processes. This development is being promoted by the growing adoption of an application pace-layering strategy to understand the rate at which business processes change across an organization, which in turn helps to classify data and determine an appropriate governance stance.

In light of these dynamic factors, the business drivers for organizations to seek solutions that help sustain "a single version of the truth" for product data become more important. They 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
  • Reduced time to market for new products and services as part of a process improvement program
  • Better multichannel (or "omnichannel") integration and improved customer service (pre- or post-sales), often with a strong e-business or e-commerce flavor
  • Increased supply chain agility, visibility and ultimately collaboration, through a cleaner foundation of information for multienterprise business processes

Market Growth Continues

Gartner estimates that overall software revenue from MDM solutions in 2012 came to $1.6 billion, an increase of 7.8% from 2011. We estimate that the MDM of product data solutions market segment amounted to $492 million, a rise of 9.3%.

The MDM of product data solutions segment tends to do rather well when, as now, the global and particularly the U.S. economy are flat or growing only slowly. By contrast, when these economies are growing by more than 2% a year, the MDM of customer data solutions segment tends to outperform the MDM of product data solutions segment.

In "Forecast: Master Data Management, Worldwide, 2010-2015" (Note: this document has been archived; some of its content may not reflect current conditions) we project five-year compound annual growth rates of nearly 20% for the overall MDM software market and 9% for the MDM of product data software segment through 2015.

How the Vendors Stack Up

Our estimates show that the megavendors dominate this market segment: SAP has a 35% share, IBM 30% and Oracle 25%. More importantly, though, this market is dominated by best-of-breed solutions, including those from these vendors — IBM's market share rests mainly on a best-of-breed acquisition, Oracle's on a developed best-of-breed solution, and SAP's on a best-of-breed acquisition. The "suite play," which often relates to a multidomain MDM message, does not dominate this market segment.

Members of the largest group behind the megavendors are growing faster. Stibo has a market share of approximately 8%, Tibco 6.2% and Riversand 3.4%. This group is also dominated by best-of-breed solutions. In fact, three of its four members — the exception is hybris — have also developed a single-product strategy to tackle other segments of the MDM market, such as MDM of customer data solutions. All these vendors achieved double-digit growth in 2012, according to our estimates. Several of these smaller vendors have moved to new positions in the Magic Quadrant.

The last group includes vendors that target a particular niche, whether a certain industry (such as distribution) or company size (such as SMB). These vendors command a variety of growth rates and market shares and tend to be smaller than the other vendors. Of note is Heiler, which was acquired by Informatica in 2013, marking a change in Informatica's strategy from "build" to "buy." In addition, SAP acquired hybris in 2013, though this purchase had more to do with hybris's e-commerce solutions than its strength in MDM of product data solutions.

Other vendors in this market segment are not included in this analysis as they did not meet the inclusion criteria. A noteworthy instance is Tribold. This vendor has, according to our estimates, over $20 million in software revenue associated with MDM of product data, but most of that revenue, we believe, comes from a single industry segment (telecommunications). Tribold is now attracting prospective customers in other industry segments, so it may well qualify for the next issue of this Magic Quadrant.

Many other vendors, some of them small, are innovating in and around the field of MDM of product data. Semarchy, a small French vendor, is focusing on helping clients with an "evolutionary" approach to scaling MDM. Collibra, another small vendor, focuses on the information stewardship side of MDM. These and other vendors show that this market segment is vibrant and constantly evolving. We expect to see more acquisitions and new entrants in the next few years.

Activity in the MDM of Product Data Solutions Segment in 2013

Based on our research and interactions with Gartner clients, vendors' reference customers and other end-user organizations, the following key themes and ideas in this market segment have emerged, solidified or become clearer in 2013. We list them in no particular order:

  • Very few end-user organizations reported that they conducted a proper ROI analysis before selecting a software package. Many reported that the software was part of a "strategic decision."
  • Increasing numbers of end users reported "adding additional data" or "adding functionality" to an established MDM hub that ought, in hindsight, to have been added to other business applications instead.
  • The vast majority of live implementations have too little governance or stewardship; the focus tends to be on data management by IT, not information governance by the business for the business.
  • Some successful end users reported that success was due to a single "citizen governor" or "citizen steward," since:
    • Governance is not yet embedded in day-to-day work.
    • Implementation "gets by" with one or two key individuals who take it upon themselves to make and implement governance decisions.
  • The risk with this approach is that if these "good citizens" leave the company or change role, MDM is likely to fail.
  • A notable number of SAP and Oracle clients did not conduct a competitive analysis before adopting that vendor's MDM solution. This approach could lead to end users discovering later that the adopted solution does not meet their requirements.
  • A number of end users noted that they considered "security" far too late — even after initial implementation. They are discovering the need to include security as an information policy, and are realizing that they should have thought about this sooner.
  • End users remarked on hiring matters:
    • Some hired staff that had "just completed an MDM program elsewhere," even in different industries, and this helped them get going.
    • Some forward-looking end users used MDM as one of several "tools" to prepare for the many "baby boomers" who are about to retire and take with them a large amount of IP.
    • Some reported a shortage of knowledgeable ESP/consulting vendors for implementation, and especially for some of the vendors' offerings.
  • One reference customer summarized the view of many: "We 'get it' now, in that the tool [implemented] is not that hard to do. It's the year afterward where we struggle to absorb the needed business and process changes in how we do our work (and thus make information governance "stick") — that is where the business value gets harvested."

All in all, 2012 and 2013 have been good years for this market segment. However, MDM technology in this segment is in the Trough of Disillusionment on Gartner's "Hype Cycle for Enterprise Information Management, 2013" — and the data and insights summarized here show why. This situation is unlikely to change for a year or so, due to the scale of work needed to overcome these (mostly nontechnical) challenges.

Evidence

The analysis in this document is based on information from a number of sources, including, but not limited to, the following:

  • Extensive data on functional capabilities, customer base demographics, financial status, pricing, and other quantitative attributes gained via a "request for information" process engaging vendors in this market.
  • Interactive briefings in which the vendors provided Gartner with updates on their strategy, market positioning, recent key developments and product road map.
  • A telephone and Web-based survey of reference customers provided by each vendor, which captured data on usage patterns, levels of satisfaction with major product functionality categories, various non-technology vendor attributes (such as pricing, product support and overall service delivery), and more. In total, 150 organizations across all major world regions provided input on their experiences with vendors and tools in this manner.
  • Feedback about tools and vendors captured during conversations with users of Gartner's client inquiry service.
  • Market share and revenue growth estimates developed by Gartner's Technology and Service Provider research unit.

Note 1
Definitions of Multidomain and Multivector MDM Technologies

Multidomain MDM technology is purpose-built to address the multidomain requirements of an MDM program. It has the following characteristics:

  • It can be implemented in a single instance.
  • The data model is uniform or interoperable and able to manage cross-domain intersections.
  • The workflow and UI elements are uniform or interoperable.
  • It supports at least one use case, implementation style and organization/governance model, for specific industry scenarios.

Multivector MDM solutions provide an integrated set of facilities for ensuring the uniformity, accuracy, stewardship, semantic consistency and accountability of an enterprise's official, shared master data assets. These meet the needs of the business across all five vectors of MDM complexity:

  • Industries — for example, product-centric industries, service industries and government
  • MDM data domains — for example, customer, supplier, partner, location, product, item, material, asset, ledger, account, person and employee
  • MDM use cases — for example, design/construction, operational and analytical
  • Organizational structures — for example, centralized, federated and localized organizations
  • MDM implementation styles — for example, registry, consolidation, coexistence and centralized

Multivector MDM solutions contain comprehensive facilities for data modeling, data quality, data stewardship, data governance, data services, and data integration in workflow and transactional usage scenarios. They also offer high levels of scalability, availability, manageability and security.

Note 2
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).

Over 210 organizations, representing all the featured vendors' reference bases, were contacted for this survey. Unsurprisingly, 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.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities 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/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

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.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those 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 those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

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.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.