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January 12, 2012

12

Gartner: MDM Market Growing, Still Improving

By Marie Lingblom

Pressures to optimize costs and efficiencies in a heterogeneous IT environment are driving more organizations to turn to master data management (MDM) as a more efficient way to manage and maintain data across multiple sources, says Colleen Graham, research director at Gartner.

Despite some grumbling about low MDM return on investment, organizations must ensure the accuracy and consistency of its master data in its various points of operations, particularly following an acquisition or in larger organizations.

MDM is being increasingly viewed as the best way to overcome mind-boggling complexities of managing data, particularly amid rapid adoption of social networking and cloud computing in businesses of all sizes. Add increasing governance, risk and compliance and the focus zeroes in on MDM to support these initiatives, Graham noted in Gartner’s release of a worldwide MDM software revenue forecast of $1.9 billion this year, positioned to reach $3.2 billion by 2015.

The overall MDM software market is dominated by three major players—IBM, Oracle and SAP, according to Gartner. Still, more than half of the revenue is driven by products from smaller, specialized vendors.

In Gartner’s estimation, the next four years will find larger vendors gaining additional MDM specialization via acquisition. Smaller vendors, meanwhile, will likely acquire each other to build market share and increase functionality within their portfolios.

There is also an open door for the entrance of data integration and data quality providers because small- to mid-sized organizations looking to adopt MDM will demand lower prices and more flexibility. As a result, Gartner predicts many new MDM vendors and offerings will be focused on areas such as open source and cloud computing/software as a service.

Digging a bit deeper, Gartner also separately released it annual Magic Quadrant for Master Data Management of Product Data Solutions. IBM and Oracle emerge here as the only “leaders” in this year’s report. “Niche players” include Enterworks, Heiler Software, Hybris, Informatica, and Orchestra Systems. SAP lands in the “visionaries” category with Riversand and TIBCO Software.

Gartner defines MDM of product data solutions as applications designed to create a single version of a product for an enterprise, across all operational and analytic uses, independent of any other repository of product data. MDM systems store master data related to products and other attributes of data pertaining to products.

Gartner’s annual Magic Quadrant positions vendors based on their “completeness of vision and ability to execute.” One area Gartner points to for improvement in this area, however, is support for the data steward, or the person who develops definition and coding structures for data, ensures the data’s accuracy, authorizes access, and establishes data use and protection requirements.

For instance, Gartner suggests a need to better standardize results and present them in a packaged and uniform, single environment for the product data steward, in a form that works alongside other MDM-related tasks that stewards follow.
Gartner’s MDM market forecast notes the largest domains of the MDM software market are MDM of product data as well as MDM of customer data, each predicted to double in size over the next four years. The market for MDM of product data is projected to reach $688 million this year, and to surpass $1.1 billion in 2015.

The market for MDM of customer data, which helps an organization cross-sell and cross-market, meanwhile, is expected to reach $644 million in 2012 and to exceed $1 billion in 2015.

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12 Comments
  1. Apr 23 2012

    Great article..
    Is there any figures on what are the potential market size for mdm hosted in cloud currently? For 2015, I understand, Gartner predicts that 10% of MDM implementations will be cloud offerings..

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