In a somewhat surprising move, Software AG announced that they have acquired MDM vendor Data Foundations. I say surprising because they had, according to the Gartner 2009 MDM report by John Radcliffe, owned the worldwide rights to OEM the Orchestra Networks EBX platform, which they marketed as Web Methods MDM. This relationship established approximately Dec 2006, ended abruptly last year. Word was that Orchestra Networks, a French based company didn’t have much traction with the Software AG OEM outside of France, which may have precipitated the move to end the relationship.
Still why Data Foundations? A small company based out of New Jersey, self describing their product OneData as “a refined and mature product, proven in the field to meet a variety of business needs such as true multi-domain Master Data Management, global Reference Data Management, product data cleansing and harmonization, and customer and counterparty data integration.”
It’s true that since Informatica acquired Siperian (disclosure: my former company) and IBM took out Initiate Systems, there have been relatively few pure play best of breed MDM vendors left in the marketplace. In fact most companies that were left were mainly data quality or identity matching vendors, rushing to market and position themselves as “MDM” in order to fill a gap in the marketplace now dominated by the mega-vendors. There had been relatively no activity in the MDM M&A space since Tibco acquired Netrics (see “MDM Exhaustion or Ho Hum Deal“) back in March 2010, which is incidently that last time I wrote anything about MDM on my blog. See my post, “MDM M&A, Who’s Who of Who’s Left” speculating who would be the next to be acquired containing the diagram (pre-today’s announcement) below.
To give Data Foundations credit, they have been steadily putting together the integrated functionality and marketing positioning necessary to represent themselves as a full MDM product. Specifically multi-domain in which they built upon their product MDM heritage to extend to customer and counterparty support. A US focus vs. Orchestra’s predominantly French and French Canadian focus, probably didn’t hurt either.
So will this shake up the MDM marketplace? I sincerely doubt if Informatica, IBM, Oracle or even SAP are particularly bothered by this move by Software AG. Still it’s a good sign for the players who are left that the market is interesting and active enough for larger vendors to pull out their checkbooks. I have no deal visibility into what Software AG paid for Data Foundations, but I’d guess at $30-$40M (assuming $10M in revs at 4x). Not a terrible result, but for a company that was founded in the 1990’s probably not an exciting deal for the majority of the employees either. For now, I still rate Informatica with Siperian the true multi-domain MDM leader, with IBM as ever a tremendous influencer and competitor through sheer brute force and ubiquity.
Big companies yet to make a major move include HP (new CEO says Software is a focus) and EMC (will they ever get past their belief that EMC documentum is unstructured MDM and that is enough? Or will they just buy Informatica and be done with it). In the MDM fish bowl Orchestra Networks is still swimming alone and available, as well as Kalido, Talend and Visionware to name a few.
Congratulations to Data Foundations for finding what I hope will be a good home for their technology and employees. But I still say most of the interesting MDM focused deals have been done and the Software AG deal while interesting to Software AG customers, won’t have a major impact on the market. 