By Graeme Burton
It would be hard to ignore a start-up company which has been selling in earnest for a little over 18 months, yet has been covered in accolades from publications across the globe including Information Week, Computerworld and PC Week. Data mart tools vendor Informatica Corp was even named by one magazine as one of the top 100 technology companies of 1997. The question is: has the company got a remarkably good product or is it just a remarkably good public relations effort? Informatica, based in Menlo Park, California, was founded in 1993 by Gaurav Dhillon and Diaz Nesamoney, two refugees from struggling systems and services vendor Unisys Corp. Dhillon had also spent some time at systems and applications management firm Sterling Software Inc. Their initial idea was to build a suite of user-friendly data migration tools that they could use to underpin a data warehousing consultancy. Informatica secured its first round of funding – $2.5m – from Bay Partners, Discovery Ventures and Partech International in September 1995.
So many plaudits
A second round – $6m – from the initial three companies, in conjunction with Integral Capital Partners, was finalized in June 1996. A third round of funding – $9m – came from Weiss, Peck & Steer, as well as Bay, Discovery, Partech and Integral, with total investment adding up to $17.5m. But while searching for venture capital backing the company realized that, with extra development, its suite, Open Bridge, could stand up as a product in its own right. Companies building data warehouses were finding that the huge amount of work involved and lengthy implementation times were making the return on investment on such projects stretch to four years or more. Informatica’s proposition: distribute the effort by building subject or work group specific ‘data marts’, and users could see a return on investment within just 90 days. By May 1996, the PowerMart suite, the result of that extra development, had made its debut. PowerMart is comprised of four components: a tool for visually defining mappings (of the data mart) and data transformations; a repository for storing that information; a server manager for configuring and monitoring the data marting process; and, of course, the server which performs the transfer of the source data onto the target data marts. The suite runs on all standard databases – Oracle, Sybase, Informix and Microsoft SQL Server – as well as Windows NT and Unix operating systems. The reason the product has earned so many plaudits and column inches since its debut, says marketing vice president Paul Allbright, is its ease of use, particularly when compared to competitor’s data migration offerings, principally from Prism Solutions Inc, Evolutionary Technologies (ETI) and Carleton Corp, which was recently acquired by data cleansing specialist Apertus Technologies Inc (CI No 3,282). In August last year, Informatica took its technology a stage further when it unveiled the Enterprise Data Mart Architecture (EDM), a blueprint for building a data warehouse from the bottom up by linking independent data marts. Instead of every data mart extracting data from operational corporate databases, which often overloads them, the EDM architecture provides a central repository, called the dynamic data store, into which data is moved before being replicated in the data marts. As a result, users can start out building a few data marts using Informatica technology and decide to build an enterprise-wide data warehouse later. But although Informatica’s sales are not bad, they do not yet justify the enthusiasm of the company’s many supporters. Informatica is reticent about giving precise revenue figures but it boasts that it has signed up around 100 customers since the launch of the PowerMart suite last spring. With every sale averaging about $80,000, according to the company, Informatica has enjoyed revenues over the last 18 months of about $8m. Not bad for start-up, but not exactly another Netscape either. The opinion of analysts is also mixed. Wayne Eckerson, a data warehousing analyst with the Patricia Seybold Group, believes Informatica’s technology is good for rolling out data marts, but that its architecture for linking those data marts and creating a fully-fledged data warehouse misses the point. Like all data warehouses, Informatica’s model requires a central repository, and it is populating that repository with the correct data that is the most challenging part of building a data warehouse.
Increased competition
To my mind that’s 75% of the work of building a data warehouse, says Eckerson. However both Eckerson and Henry Morris, program director for data warehousing and applications with International Data Corporation, agree that Informatica faces increased competition both from specialist vendors, such as Sagent Technology and VMark Software, as well as more fearsome industry giants such as hardware vendors NCR, database giant Oracle and Microsoft. Yet the biggest hurdle Informatica has to overcome is user indifference. When we do surveys we notice the biggest competitor to Informatica is not Prism or ETI, but people who prefer to do the job themselves, says Morris. Informatica’s co-founder Gaurav Dhillon agrees. People writing it by themselves is our single biggest competition, says Dhillon. Given that, it could be Informatica’s public relations department which makes all the difference between it breaking into the big time or remaining just a niche player. CBR.
