In late April, 2014, Informatica (INFA – NASDAQ) boasted another sterling quarter from a financial perspective for Q1-FY14, with revenues up 13%, and deferred revenues up 14%. What makes INFA’s Q1-FY14 results particularly impressive is that Q1-FY13 was an important comeback quarter for INFA, thus Q1-FY14’s 13% growth rate was over a strong baseline. INFA’s growth spanned the breadth of the INFA product line, from MDM to Cloud, from Data Quality and ILM to classic data integration. INFA’s growth seemed balanced between expanding its footprint with existing customers and adding new customers, meaning INFA is making progress in terms of share of wallet and market share.
INFA saw a slight shift of business towards Europe, but North America still accounts for 63% of INFA’s revenue. One wonders when and if the integration software market in Asia/Pacific will bloom for specialty integration ISVs, or if it has forever been soaked-up by large vendors like IBM, Oracle, SAP, and Fujitsu. Regardless, the lack of establishing a deep foothold in Asia/Pacific has not interfered with INFA’s positive results.
On the product front, besides having established a comprehensive solution for Salesforce.com integration, INFA accounced a new connector for the growing-in-popularity Amazon Redshift cloud data warehouse. On the partnership front, earlier in April INFA announced it was offering some of its data management solutions for Oracle ZFS Storage appliances, a curious arrangement giving that Oracle also offers competing data integration and data management software.
Thus, INFA goes into the upcoming annual Informatica World with strong product, partner and sales momentum. As, however, I’ve noted several times, Informatica is not in a position to sit on its laurels, for INFA isn’t the only integration software specialty vendor flexing market muscles:
- Dell Boomi similarly announced lofty growth statistics, growing volume of its iPaaS solution Atmosphere by 13x over the past year, and launched the latest update to its Atmosphere world-class iPaaS. In the latest update Dell Boomi added several innovative features for Atmosphere that involved crowdsourcing, analytics, and patented “Predictive Assistance” to help customers gain insight into problem and performance analysis and resolution. In a nod to the still important SOA and MOM arenas, Dell Boomi also added message queuing features.
- SnapLogic, the ease-of-use integration specialist, where the CEO is Guarav Dillon who is the founder of Informatica, enjoyed “tremendous growth” with year-over-year booking growth of 100%. Not to be outdone by Informatica’s work with Amazon Redshift, SnapLogic unveiled “SnapPatterns” in late March to accelerate integration/ETL and load for big data players like Amazon Redshift.
- Jitterbit, another ease-of-use integration specialist, just announced that it had experienced 100% year-over-year revenue growth. At the same time Jitterbit unveiled its first, end-to-end cloud integration offering called Harmony, for pure SaaS, hybrid, or private deployments. Jitterbit uses a virtualization, aka a “cloud elastic agent” to span deployments, and offers a truly integrated feature set including ILM, mapping, a long list of connectors, and a non-coding designer environment.
- Talend had a partnership bonanza month in April, unveiling alliances with Human Inference, a European data quality specialist, SaaS predictive analysis provider BlueYonder, BI specialist Jaspersoft, and certification for the latest big data platform from swimming-in-VC-cash Cloudera. The only fly-in-the-alliance-ointment was Jaspersoft, who was subsequently acquired by Tibco, a Talend competitor in the integration space. By the way, Tibco too announced Q1-FY14 record revenue results in March.
- One of the independent BPM (business process management) leaders, Appian, is holding its annual customer event, Appian World, as I write this, and just unveiled the latest update to Appian 7 which includes new data integration capabilities for content management sources. Earlier in 2014 Appian announced that its cloud revenues had grown year-over-year by 90%, and 70% in terms of international growth, for FY13.
- BPM and CRM specialist Pegasystems announced a record year for FY2013 in early 2014 with an increase of 85% of free cash flow, and record results for Q4-FY14, initiated providing investor guidance, and will have its first quarterly financial results call on May 6th playing the guidance-style disclosure game.
We are just scratching the surface here, and I apologize to all the other integration vendors that I did not include in this list, but space at least on my blog is finite. I did want to also mention that what I like to call “embedded integration” has also grown more sophisticated. Embedded integration solutions are full throttle integration offerings that come as part of an enterprise applications suite. While many watchers are familiar with what Oracle and SAP do on that front, Infor ION stands out as a beautifully architected embedded integration solution that literally glues together the vast Infor applications portfolio for customers. Does ION compete with Informatica? Indirectly, yes, and it would compete directly if Infor offered ION as a standalone product.
Suffice it to say the Informatica keeps the beat going, but so does the entire software integration market. Therefore INFA will not be taking R&D or strategy/M&A vacations any time soon. What is taking place is the word “integration” now carries a more strategic context than ever before in its history. Here are the reasons:
- Classic data/application integration, which is recycling itself because of SaaS and PaaS apps, and reinventing itself as its own set of SaaS apps.
- The blurring of data management and data integration: If integration software captures an organization’s metadata, and actually processes ETL and other transformations, plus understands and acts on security policy, why shouldn’t integration and data management act as a unified, seamless solution for customers? It will, and several vendors are already on the path.
- The blurring of data/application integration and process integration: We have known that processes need data, and vice versa, for decades. Frankly it has been shocking how slowly the supply side has acted on this inescapable truth of computer science. Regardless, now Informatica offers process integration features albeit not to the extent of say Appian, and Appian offers data integration features albeit not to the extent of Informatica. The melding of data, app, and process integration is inevitable, and underway.
- Cloud and virtualization offer all kinds of new development and deployment approaches for all kinds of integration. Dell Boomi, for example, figured out early that virtual integration wrappers would enable it to reach into basically any kind of deployment scenario (Boomi calls them Atoms). Informatica does something similar with Vibe.
- Last but not least, the notions of iPaaS, API management, and IoT or Internet of Everything promises an integration based style of development, particularly in context of clouds, that will revolutionize how organizations think about apps. IBM took a long blue stride in that direction with its BlueMix “application composition” environment earlier this year.
I hate repeating myself, but I will admit to writing a similar blog post a few months ago. But there is no escaping it. The integration software market, and its leaders, continues to expand in terms of revenues, technologies, and most importantly importance to organizations. The good news for integration software vendors is that they are currently in vogue. The bad news is competition is fierce for a market that continues to grow in the 15-20% range, and shows no signs of letup. Sorry Informatica CEO Shoaib Abbasi, but there is once again very little time to enjoy Informatica’s latest cycle of success.