How Informatica reinvented itself for the cloud

How Informatica reinvented itself for the cloud

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People have long regarded Informatica Inc. as a stodgy provider of extract, transform and load or ETL services, proficient at moving data from mainframes to data warehouses, but not much else.

Then in 2015, the company went private, entering its chrysalis for a six-year metamorphosis. The company emerged in the public markets in October 2021 as a beautiful cloud-native data management butterfly – a metamorphosis as remarkable as it was transformative.

Informatica’s cloud journey

I joined the sold-out crowd at Informatica World in Las Vegas this week, the company’s first in-person conference in three years. At the center of its remarkable transformation: its Intelligent Data Management Cloud or IDMC, a cloud-based platform as modern as its on-premises ETL tools are relics of the last century.

ETL is still an important part of the Informatica story, to be sure – but now it’s a component of the IDMC’s data integration module.

IDMC includes seven primary modules: data catalog; data integration; API and application integration; data quality; master data management and 360 applications (including Customer 360); governance and privacy; and the data marketplace.

These seven modules leverage Claire, Informatica’s AI-powered metadata intelligence and automation technology, as well as a common metadata system of record, as show in this IDMC marketecture diagram:

The Intelligent Data Management Cloud (Source: Informatica)

ETL, of course, doesn’t even appear in the figure above, since it’s buried within data integration. Today, Informatica is no longer (just) the ETL leader. ETL is only a part of the integration story, and integration is only a part of the Informatica story.

IDMC has been in the works for a while. One of the reasons for going private in 2015 was to facilitate the difficult transition from perpetual licensing to subscriptions, an important precursor to rolling out a cloud platform.

The advent of COVID in 2020 changed this timeline. Informatica accelerated its move to the cloud as customer preferences rapidly shifted. It took about a year to flesh out IDMC, and now it’s mostly complete. “We have been innovating maniacally,” said Jitesh Ghai, Informatica’s chief product officer.

Moving from an on-premises, perpetual licensing business model to a cloud-based subscription model is no easy feat, especially for an enterprise software vendor. The Innovator’s Dilemma risk of alienating existing customers can sink the entire company.

Informatica, however, was largely able to avoid this dilemma because of the nature of its legacy ETL tooling. What is integration, after all, if not technology for connecting things, including old to new?

Instead of cannibalizing its existing business, Informatica found that its customers have largely been excited to move to the cloud to take advantage of the company’s full data management suite of capabilities – even though some customers retain the on-premises technology as well. As Informatica Chief Executive Amit Walia points out, “Cloud is the new normal for the digital enterprise.”

In other words, the on-premises Informatica story is becoming a valuable component of customers’ hybrid multicloud strategies that are largely cloud-first but still retain on-premises technology whenever it continues to meet the business need.

Building the Intelligent Data Enterprise

There are three primary facets to Informatica’s core strategy and theme of InformaticaWorld: Building the Intelligent Data Enterprise.

The most straightforward of these facets is how Informatica helps customers become more data-driven to help them make better decisions and gain the insights they need to run their organizations more efficiently, improve how they serve customers and generally run their business operations better.

Helping customers execute, however, is more tactical than transformative. Complementing this strategy is the second facet of Informatica’s strategy: facilitating digital transformation.

Digital transformation is now an overused term, watered down to the point that vendors slap it on their web sites with abandon. Informatica, in contrast, shrewdly connects its data management offerings to its clientele’s digital transformation efforts with the linchpin of customer centricity.

Customer centricity is at the heart of every successful digital transformation, as companies must rework both their technology as well as their organizational silos to put customer needs at the center of their efforts.

Fundamentally, such transformation depends upon data. Siloed organizations invariably struggle with siloed data that place roadblocks in the way of digital transformation efforts.

With Informatica’s help, its customers can break down these silos, building single, authoritative views of their data that empower them to support customer needs end to end.

Integration is part of this story, but so is master data management, data governance and data quality – all IDMC modules.

Without data quality, businesspeople can’t trust their data. “All decision-making processes require that data are accurate,” explained Sherry Hidalgo, senior enterprise data manager at Shaw Industries, an Informatica customer.

Data governance is also essential for customer centricity – not the roadblock-focused governance of the past, but the automated governance that Informatica has built into the IDMC. “In reality, governance is making data more transparent and easier to access,” Hidalgo adds.

The third facet of Informatica’s strategy is facilitating the shift of businesspeople as passive to active consumers of data.

Historically, the information technology department has been responsible for enterprise data; the word “information” in information technology is evidence of that. IT has always performed the data heavy lift, giving the results to the business as requested.

First there were mainframe jobs that yielded reams of green-striped paper. Then along came data warehouses, business intelligence tools and other technologies – but still, IT was largely in charge of the data.

The IDMC fundamentally changes this equation with its no-code capabilities across its modules. Business users can now interact directly with corporate data via the platform’s customer 360 capabilities, automated data quality and governance modules, and even the data marketplace.

Business users no longer have to know what data they require before they put hands on their computers. They are free to explore, to ask questions, to be curious – essential characteristics of an Intelligent Data Enterprise.

Focus on the enterprise

Informatica has a solid enterprise story, as the IDMC offers scalability, governance, security and integration – all important requirements for any enterprise-class cloud platform. The company’s partnerships are also enterprise-class, as they leverage deep relationships with Google Cloud, Microsoft Azure, Amazon Web Services, Oracle Cloud, Snowflake, Databricks and others.

Informatica owes success with partners who are themselves leaders in their respective markets in part to its horizontal neutrality. This neutrality story is serving them well – both as a horizontal data management play as well as avoiding channel conflict with partners across the board.

Its relationship with cloud data warehouse leader Snowflake Inc. is an important case in point. The two vendors’ synergies center on data in the cloud, but their offerings are strictly complimentary. “Snowflake is the horse, and Informatica is the cart,” according Vineet Walia, chief strategy officer at Informatica.

And the data? They are the hay in the cart, of course.

How to compete with Informatica

Given the strength and completeness of the IDMC offering, Informatica competitors will find that taking on the vendor where it’s strong may be an insurmountable uphill battle.

There are numerous point solutions that compete with various IDMC modules, of course – but for most large enterprises, purchasing individual products will inevitably require assembling them into a coordinated platform – and such a conglomeration will never compete favorably with the IDMC.

To be sure, Informatica targets large enterprises with the pricing to match. But for those companies that need what Informatica offers, signing up for the IDMC will be a worthwhile investment.

Jason Bloomberg is founder and president of Intellyx, which advises business leaders and technology vendors on their digital transformation strategies. He wrote this article for SiliconANGLE. Microsoft is a former Intellyx customer. None of the other companies mentioned in this article is an Intellyx customer. Informatica covered the author’s expenses at InformaticaWorld, a standard industry practice.

Image: geralt/Pixabay

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