Demand for data integration software is growing fast as organizations race to meet the challenges posed by master data management (MDM), cloud computing, business intelligence (BI) and "big data" analytics initiatives,
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The report from Stamford, Conn.-based IT research firm Gartner Inc. finds that the market for data integration tools amounted to about $1.63 billion at the end of 2010 -- an increase of more than 20% over 2009. Gartner predicts the market will grow by another 15% in 2011.
"We've been watching the growth continue and the growth is coming from lots of different directions," said Ted Friedman, a Gartner vice president and information management analyst and co-author of the report. "More and more companies want to manage information in a strategic way so they're looking for more modern and robust ways to move data around the enterprise."
The annual Gartner Magic Quadrant report ranks the top data integration software vendors as leaders, challengers, niche players and visionaries based on several criteria including "completeness of vision" and "ability to execute."
Informatica Corp. and IBM retained their positions as the overall leaders. Other software vendors listed in the leaders quadrant include SAP AG, Oracle Corp., and DataFlux, which is owned by SAS Institute Inc. Gartner named Microsoft the lone challenger, while iWay Software Inc., Talend and Pervasive Software Inc. were dubbed visionaries. The lone niche player was Syncsort Inc., a Woodcliff Lake, N.J.-based company that got its start serving the mainframe market in 1968 and later expanded into distributed systems.
While the biggest vendors in the data integration tools market are looking at ways to incorporate data quality and MDM tools into their offerings, Syncsort remains focused on providing customers with relatively low cost yet highly advanced extract, transform and load (ETL) capabilities, according to Josh Rogers, the company's vice president of worldwide sales.
"We operate a core set of ETL capabilities and we think that is a market [that has] frankly been underserved, so we continue to invest in the core engine," Rogers said. "I think you'll see us start to invest in other areas to kind of broaden what we deliver, but we're not looking to build out a platform that is equal in breadth to an Informatica or an IBM."
New challenges mean increased demand for data integration tools
The ongoing rise in demand for data integration tools stems primarily from a growing realization among companies that strategic data management is highly important in today's fast-paced and economically challenged business environment, according to the report.
It's a realization that is leading more firms to enact MDM programs that are designed to ensure the accuracy and consistency of important contextual information about products and customers. Friedman said another factor contributing to the rising demand for data integration tools is the desire among many companies to share information more effectively across departments and with external business partners.
At the same time, more companies are seeking to leverage the savings associated with cloud-based applications, which reduce the need for organizations to manage systems internally and, ideally, allow them to focus on their core competencies.
"As organizations move more applications to the cloud and leverage more cloud services, there is a need to synchronize that cloud-based data with stuff they've got on premises," Friedman said. "I would argue that cloud is a driver here as well."
Friedman added that more companies are looking to gain valuable business insights from so-called big data stores -- which might include, for example, streaming information about consumer behavior on a company's website.
"You're hearing a lot about big data and analytics around big data," Friedman said. "To do that kind of stuff you've got to collect the data that you want to analyze and put it somewhere. [That] in effect is a job for data integration tools."
Best practices for selecting a data integration tools vendor
Organizations considering an investment in new data integration tools should keep a few pieces of advice in mind, according to Friedman. The first is to look for vendors that can support a wide range of integration technology "delivery styles" because needs are likely to change over time.
"I cited Syncsort as being a niche player because they mainly do ETL," Friedman said. "In comparison, you have vendors like an IBM who do ETL plus data replication plus change data capture plus data federation. Seek out vendors that support a range of styles because it's not a one size fits all."
Gartner also recommends that companies seek out data integration vendors that focus on helping customers meet data quality goals.
"Organizations cannot be successful in their data integration work unless they have a very strong focus on data quality built in," Friedman said. "That's because it's not only about delivering stuff from here to there. You also have to make sure you're delivering the right stuff."
Friedman added that it's also a good idea to look for software vendors with strong metadata management capabilities.
"Metadata capabilities are also really important because they give you transparency and visibility into where the data is coming from, where it's going and how you're transforming it along the way," the analyst said. "There is increasingly a need to expose those insights to business people and I think rich metadata capabilities help with that."