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November 30, 2009

Master of complexity

Sohaib Abassi is CEO of the largest independent data integration firm on the planet: Informatica. The firm has just acquired its way into the Complex Event Processing space, and launched a cloud integration platform to boot. Jason Stamper reports.

By Jason Stamper

When Sohaib Abassi joined Oracle in 1982, it had just 30 employees. By the time he left 20 years later, it had 42,000 staff and annual revenues of $9.5bn, thanks in part to his leadership of two key divisions. Since he slipped on the CEO shoes at Informatica, he has taken sales there from $219m in fiscal 2004 to $455m in 2008 – a growth rate two and a half times higher than the software industry as a whole. “It’s a good time to be in this business,” he says modestly.

So how has this industry veteran – the Pakistani son of an air force man who settled in the US in 1974 before studying computer science – built a firm with such a dominant position, in a sector that many consider little more than the ‘plumbing’ of the IT world?

Don’t miss
Listen to the entire 20 minute CBR interview with Sohaib Abassi, covering CEP, SOA’s limited success, cloud computing and those HP acquisition rumours at

It’s not been an easy ride. When Abassi took the reins of Informatica in the summer of 2004, he joined at a critical juncture in the company’s history. At that time Informatica had just offloaded an unsuccessful analytic applications business and was leaking market share to arch-rival Ascential Software.

Financially the company was coming off a string of under-performing quarters, and its stock price was sliding south fast. Abbasi’s predecessor, the firm’s co-founder Gaurav Dhillon, had also just unveiled an ambitious strategy that would evolve its PowerCenter suite to broader data integration markets. Abbasi had his work cut out to put the company back on the right track, and regain lost ground.

Abbasi says the company learnt a valuable lesson from its ill-fated foray into business analytics – to stick to its knitting. Focus is critical, he says. When you step away from your core area of competency you’re competing against more experienced vendors. Our singular goal is to be the dominant leader in the enterprise data integration market.

Abassi set about rebuilding relationships with the business intelligence and applications vendors who had been alienated by Informatica’s foray into analytics apps: the likes of Cognos, Business Objects, SAP, Siebel and Sybase. He emphasised Informatica’s ‘open’ approach to data integration, insisting the firm should be able to integrate pretty much any database, application server, operating system or hardware. Unlike some of our rivals we have no hidden agenda and no bias to promote one database or application source over another,” he said at the time.

The firm has just expanded its partnership with HP – HP will embed Informatica as part of its Neoview data warehousing product – and Informatica also enjoys partnerships with Oracle, which ships Informatica as part of Oracle Business Intelligence Enterprise Edition; Microsoft ships Informatica as part of its enterprise search product and SAP ships its technology as part of NetWeaver.

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When IBM bought Informatica’s close rival Ascential in March of 2005 for $1.1bn in cash, it not only lent substantial credibility to the data integration space but also left some wondering whether Informatica would also become acquisition fodder. But emphasising the importance of independence for an integration firm tackling numerous hardware and software integration tasks – and quickly growing the company into one with a sizable enough revenue stream to be taken seriously as a standalone player – Abassi has helped to turn Informatica into a rather large fish in a relatively small pond.

Expansion plans
Key to that strategy has been ensuring that the firm continues to innovate, for instance ensuring its continued relevance as companies have moved towards Services Oriented Architecture (SOA). The need was clear to seasoned observers: “When someone or other thought up SOA as a method for untangling the spaghetti of inter-communicating applications, they forgot about the hairball that involves providing data to those selfsame applications (now web services),” notes Philip Howard, research director at analyst firm Bloor. “What you need is the same level of abstraction about data as you do with SOA.”

This month, Informatica launched into beta testing its Cloud 9 offering, which it claims is a comprehensive platform for cloud data integration. Expected to ship this December, the company says Informatica Cloud Platform enables developers and systems integrators to build, share and reuse custom data integration and data quality mappings and run them in the cloud.

“We’re using Informatica Cloud Services to replicate millions of rows of data from Salesforce CRM to a centralized database running on Amazon EC2,” says Stephen Brown, technical architect, Telegraph Media Group. “As we think about moving more and more of our IT infrastructure to the cloud, the ability to develop more complex mappings and workflows and run them as custom services for line of business managers will allow us to continue to provide self-service, while IT remains in control.”

Another area where the company is intent on expanding its footprint is Complex Event Processing, where frankly it is playing catch-up with Aleri, Avaya, IBM, Progress Software, Tibco and UC4. But Informatica’s Abassi believes it has given itself a credible story in the space thanks to its acquisition of CEP specialist Agent Logic in September. CEP helps enterprises rapidly detect, correlate, analyze and respond to event data.

Financial services firms have been at the forefront in CEP technology adoption – it’s practically essential for modern fraud detection systems – but Agent Logic
focused primarily on applications within US government agencies.

Terms of the Agent Logic acquisition were not disclosed, but Agent Logic had 75 employees, and Gartner estimates it had an annual run-rate in the region of $13m, or about 10% of the total CEP market of $148m in 2008.

So why move into this category? Abassi points out that IDC believes this segment will see growth rates in excess of 50% between 2008 and 2012. “This technology enables organisations to become more agile, more responsive and more adaptive,” Abassi tells CBR, “by enabling them to detect, correlate, analyse and respond to events, and there are lots of applications in the public sector as well as the commercial sector.

“The second reason we are very excited by this acquisition is that the combination of data integration and CEP will enable us to deliver a unique differentiator technology,” he says. “Very specifically, event-driven active data integration, which refers to when events are detected, to be able to interpret them in a historical context allows you to be a lot more intelligent in your response – by relying on a data warehouse you are in a much better position to detect what is a threat or an opportunity as opposed to just reacting to the message itself.

“And the third reason is that this organisation has had very good success selling to the US Federal Government, where there technology is being utilised by many agencies, and now we will be in an even stronger position to offer our products in the public sector,” he adds.

Abassi has created a new business unit to house the Agent Logic technology, headed by former Agent Logic CEO Mike Applebaum. Abassi will be hoping of course that it can sell the technology not just to new prospects but also to many of Informatica’s 3,850 existing customers, which include 84 of the Fortune 100.

Firing on all cylinders
Despite the recession, Informatica has not only continued to grow, it’s grown strongly. In its latest quarter ended September 30th, revenues were up 8% to $123.4m, while operating income was up 26% to $22.3m.

With a variety of far larger companies seeking acquisition targets to bolster their own growth, and Informatica’s technology playing a role in many of their own technology portfolios, there’s always the chance that Informatica will be acquired one of these days. The latest rumour was that HP may be interested in snapping the firm up, but Abassi told CBR, “There’s nothing to the rumours.” He added, “Our neutrality has allowed us to become the most trusted partner in data integration.”

With its latest CEP and cloud data integration moves, there’s nothing to suggest that Abassi cannot continue to grow Informatica above and beyond the average software sector growth rate – whether you want to dismiss what it does as ‘plumbing’, or not. 



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