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Magic Quadrant for Master Data Management of Customer Data Solutions

Magic Quadrant for Master Data Management of Customer Data Solutions

17 October 2013 ID:G00251784 Analyst(s): Bill O'Kane, Saul Judah

VIEW SUMMARY The MDM of customer data solutions market segment grew healthily in 2012. New acquisitions and integrations of prior acquisitions by the Leaders have continued, and several visions for linking MDM and social data have emerged. This Magic Quadrant will help you find the right vendor for your needs.

EVIDENCE
The analysis in this docum e nt is base d on inform ation from a num be r of source s, including, but not lim ite d to: Ex te nsive data on functional capabilitie s, custom e r base de m ographics, financial status, pricing and othe r quantitative attribute s gaine d via a "re que st for inform ation" proce ss e ngaging ve ndors in this m ark e t se gm e nt. Inte ractive brie fings in which the ve ndors provide d Gartne r with update s on the ir strate gy, m ark e t positioning, re ce nt k e y de ve lopm e nts and product road m ap. A te le phone and W e b-base d surve y of re fe re nce custom e rs provide d by e ach ve ndor, which capture d data on usage patte rns, le ve ls of satisfaction with m ajor product functionality cate gorie s, various nonte chnology ve ndor attribute s (such as pricing, product support and ove rall se rvice de live ry), and m ore . In total, 109 organizations across all m ajor world re gions provide d input on the ir e x pe rie nce s with ve ndors and tools in this m anne r. Fe e dback about tools and ve ndors capture d during conve rsations with use rs of Gartne r's clie nt inquiry se rvice . Mark e t share and re ve nue growth e stim ate s de ve lope d by Gartne r's Te chnology and Se rvice Provide r re se arch unit.

Market Definition/Description
Markets are sets of potential buyers that view a product as solving a common, identified need, and that reference each other. Market segments are portions of a market that are qualified by more exact criteria, thus grouping potential buyers more tightly. Segmentation may take two forms: A generic market may be divided into recognizable submarkets, where the same rules prevail for defining a market. An individual vendor may segment a market to target its products more precisely and differentiate itself from (or avoid competing with) other players that address the same overall market. However, the targeted buyers may not know they are part of the same market segment. Such segmentation will not be reflected explicitly in this Magic Quadrant, although it may be reflected implicitly for example, via placement of a vendor in the Niche Players quadrant. Master data management (MDM) is a technology-enabled discipline in which business and IT teams work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of their enterprise's official, shared master data assets. Master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of an enterprise, such as customers, prospective clients, citizens, suppliers, sites, hierarchies and the chart of accounts. MDM of customer data solutions are software products that: Support the global identification, linking and synchronization of customer information across heterogeneous data sources through semantic reconciliation of master data Create and manage a central, database-based system of record or index of record for master data Enable the delivery of a single customer view (for all stakeholders) in support of various business benefits Support ongoing master data stewardship and governance requirements through workflowbased monitoring and corrective action techniques MDM implementations and their requirements vary in terms of: Instantiation of the customer master data varying from the maintenance of a physical "golden record" to a more virtual, metadata-based, indexing structure The usage and focus of customer master data ranging across use cases for design (information architecture), construction (building the business), operations (running the business) and analytics (reporting the business) Different organizations' structures spanning small, centralized teams through to global, distributed organizations The latency and accessibility of the customer master data varying from real-time, synchronous reading and writing of the master data in a transactional scenario between systems, to message-based, workflow-oriented scenarios of distributed tasks across the organization, and legacy-style batch interfaces moving master data in bulk file format Organizations use MDM of customer data solutions as part of an MDM strategy, which in itself should be part of a wider enterprise information management (EIM) strategy. An MDM strategy potentially encompasses the management of multiple master data domains, such as customer, product, asset, person or party, supplier and financial masters. As the name suggests, MDM of customer data solutions focuses on managing customer data a form of "party" data, whereas

NOTE 1 DEFINITIONS OF MULTIDOMAIN AND MULTIVECTOR MDM TECHNOLOGIES

Multidom ain MDM te chnology is purpose -built to addre ss the m ultidom ain re quire m e nts of an MDM program . It has the following characte ristics: It can be im ple m e nte d in a single instance . The data m ode l is uniform or inte rope rable and able to m anage cross-dom ain inte rse ctions. The work flow and UI e le m e nts are uniform or inte rope rable . It supports at le ast one use case , im ple m e ntation style and organization/gove rnance m ode l, for spe cific industry sce narios. Multive ctor MDM solutions provide an inte grate d se t of facilitie s for e nsuring the uniform ity, accuracy, ste wardship, se m antic consiste ncy and accountability of an e nte rprise 's official, share d m aste r data asse ts. The se m e e t the ne e ds of the busine ss across all five ve ctors of MDM com ple x ity: Industrie s for e x am ple , product-ce ntric industrie s, se rvice industrie s and gove rnm e nt MDM data dom ains for e x am ple , custom e r, supplie r, partne r, location, product, ite m , m ate rial, asse t, le dge r, account, pe rson and e m ploye e MDM use case s for e x am ple , de sign/construction, ope rational and analytical O rganizational structure s for e x am ple , ce ntralize d, fe de rate d and localize d organizations MDM im ple m e ntation style s for e x am ple , re gistry, consolidation, coe x iste nce and ce ntralize d Multive ctor MDM solutions contain com pre he nsive

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facilitie s for data m ode ling, data quality, data ste wardship, data gove rnance , data se rvice s, and data inte gration in work flow and transactional usage sce narios. The y also offe r high le ve ls of scalability, availability, m anage ability and se curity.

MDM of product data focuses on managing product data a form of "thing" data. There are no discrete Magic Quadrants for other master data domains due to the relatively low level of interest in discrete solutions to govern those data domains in comparison with the customer and product data domains. We are routinely asked whether we have an overall MDM Magic Quadrant. We do not. We still believe that such a Magic Quadrant would be premature, because MDM needs are very diverse (see "The Five Vectors of Complexity That Define Your MDM Strategy"), leading to different market segments, and most evaluation and buying activity still focuses on initiatives for specific master data domains. In addition, although many MDM solutions are marketed as "multidomain MDM," they do not always conform to our definition of multidomain MDM technology (see Note 1) and we find that they have many gaps in their capabilities for, and experience of, handing every data domain (see "MDM Products Remain Immature in Managing Multiple Master Data Domains"). This Magic Quadrant provides insight into the segment of the constantly evolving packaged MDM system market that focuses on managing customer data to support CRM and other customerrelated strategies. It positions relevant technology providers on the basis of their Completeness of Vision relative to the market, and their Ability to Execute on that vision.
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NOTE 2 REFERENCE SURVEY

As part of the Magic Q uadrant re se arch proce ss, we sought the vie ws of ve ndors' re fe re nce custom e rs via a surve y conducte d online and via te le phone . The surve y include d re que sts for fe e dback on ve ndor m aturity (for e x am ple , unde rstanding industrie s, provision of innovation, re sponsive ne ss to ne w re que sts, TC O and pricing) and product capabilitie s (for e x am ple , fle x ibility in data m ode ling, support for data quality, UI support for data ste wardship, inte rnal work flow and support for m ultiple archite ctural style s). O ve r 160 organizations, re pre se nting all the fe ature d ve ndors' re fe re nce base s, we re contacte d for this surve y. Unsurprisingly, the re fe re nce custom e rs we re ge ne rally ple ase d with the ir ve ndors and products, but the y gave re lative ly low m ark s in som e are as, which we have de taile d in the analysis of e ach ve ndor. Som e of the issue s m ay be historical, as not all organizations are on the late st product ve rsions.

Magic Quadrant
Figure 1. Magic Quadrant for Master Data Management of Customer Data Solutions

EVALUATION CRITERIA DEFINITIONS

Ability to Execute Product/Service: C ore goods and se rvice s offe re d by the ve ndor for the de fine d m ark e t. This include s curre nt product/se rvice capabilitie s, quality, fe ature se ts, sk ills and so on, whe the r offe re d native ly or through O EM agre e m e nts/partne rships as de fine d in the m ark e t de finition and de taile d in the subcrite ria. Overall Viability: Viability include s an asse ssm e nt of the ove rall organization's financial he alth, the financial and practical succe ss of the busine ss unit, and the lik e lihood that the individual busine ss unit will continue inve sting in the product, will continue offe ring the product and will advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The ve ndor's capabilitie s in all pre sale s activitie s and the structure that supports the m . This include s de al m anage m e nt, pricing and ne gotiation, pre sale s support, and the ove rall e ffe ctive ne ss of the sale s channe l. Market Responsiveness/Record: Ability to re spond, change dire ction, be fle x ible and achie ve com pe titive succe ss as opportunitie s de ve lop, com pe titors act, custom e r ne e ds e volve and m ark e t dynam ics change . This crite rion also conside rs the ve ndor's history of re sponsive ne ss. Marketing Execution: The clarity, quality, cre ativity and e fficacy of program s de signe d to de live r the organization's m e ssage to influe nce the m ark e t, prom ote the brand and busine ss, incre ase aware ne ss of the products, and e stablish a positive ide ntification with the product/brand and organization in the m inds of buye rs. This "m ind share " can be drive n by a com bination of publicity, prom otional initiative s, thought le ade rship, word of m outh and sale s activitie s. Customer Experience: R e lationships, products and se rvice s/program s that e nable clie nts to be succe ssful with the products e valuate d. Spe cifically, this include s the ways custom e rs re ce ive te chnical support or account support. This can also include ancillary tools, custom e r support program s (and the quality the re of), availability of use r groups, se rvice -le ve l agre e m e nts and so on. Operations: The ability of the organization to m e e t its goals and com m itm e nts. Factors include the quality of the organizational structure , including sk ills, e x pe rie nce s, program s, syste m s and othe r ve hicle s that e nable the organization to ope rate e ffe ctive ly and e fficie ntly on an ongoing basis. Completeness of Vision Market Understanding: Ability of the ve ndor to unde rstand buye rs' wants and ne e ds and to

Source: Gartner (October 2013)

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Vendor Strengths and Cautions

IBM (InfoSphere MDM Advanced Edition)
IBM (www.ibm.com) is headquartered in Armonk, New York, U.S. IBM's InfoSphere MDM Advanced Edition (AE) version 11 achieved general availability (GA) in June 2013. IBM's total MDM software revenue in 2012 (estimated for all products and domains) was $311.6 million, of which $132 million was for AE for customer data. IBM's total MDM customer count in March 2013 (estimated for all products and domains) was over 800, of which 250 were for AE for customer data. Strengths Broad information management strategy: At IBM, MDM is central to a much broader big data and information management (IM) strategy and platform. This is attractive for large organizations looking for a wide range of IM capabilities from one vendor.

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Product strategy and vision: AE is the lead IBM product for customer and multidomain MDM and has strengths in multiple MDM styles. IBM is delivering on the convergence of its legacy products into functional "editions." The included Master Data Governance facility has improving stewardship facilities, and IBM is building capabilities to link MDM and big data. Robust data model and services: AE has a robust, extensible party data model. It can model other domains, and some industry-specific extensions are available. Reference customers gave high scores for industry understanding, governance support, integration and performance.
translate those into products and se rvice s. Ve ndors that show the highe st de gre e of vision liste n to and unde rstand buye rs' wants and ne e ds, and can shape or e nhance those with the ir adde d vision. Marketing Strategy: A cle ar, diffe re ntiate d se t of m e ssage s consiste ntly com m unicate d throughout the organization and e x te rnalize d through the we bsite , adve rtising, custom e r program s and positioning state m e nts. Sales Strategy: The strate gy for se lling products that use s the appropriate ne twork of dire ct and indire ct sale s, m ark e ting, se rvice , and com m unication affiliate s that e x te nd the scope and de pth of m ark e t re ach, sk ills, e x pe rtise , te chnologie s, se rvice s and the custom e r base . Offering (Product) Strategy: The ve ndor's approach to product de ve lopm e nt and de live ry that e m phasize s diffe re ntiation, functionality, m e thodology and fe ature se ts as the y m ap to curre nt and future re quire m e nts. Business Model: The soundne ss and logic of the ve ndor's unde rlying busine ss proposition. Vertical/Industry Strategy: The ve ndor's strate gy to dire ct re source s, sk ills and offe rings to m e e t the spe cific ne e ds of individual m ark e t se gm e nts, including ve rtical m ark e ts. Innovation: Dire ct, re late d, com ple m e ntary and syne rgistic layouts of re source s, e x pe rtise or capital for inve stm e nt, consolidation, de fe nsive or pre -e m ptive purpose s. Geographic Strategy: The ve ndor's strate gy to dire ct re source s, sk ills and offe rings to m e e t the spe cific ne e ds of ge ographie s outside the "hom e " or native ge ography, e ithe r dire ctly or through partne rs, channe ls and subsidiarie s as appropriate for that ge ography and m ark e t.

Cautions Momentum slowing: IBM's overall MDM software revenue growth slowed to an estimated 3.5% in 2012, spread evenly across all data domains, and estimates suggest that revenue growth slowed significantly for AE. Perceived as complex: AE appears in many of the client inquiries and competitive situations received and discussed by Gartner, but it is often seen as a having a larger technical footprint than its competitors. Reference survey concerns: A below-average number of AE reference customers responded to Gartner's survey, and they gave below-average scores for total cost of ownership (TCO), workflow and reporting.
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IBM (InfoSphere MDM Standard Edition)

IBM (www.ibm.com) is headquartered in Armonk, New York, U.S. IBM's InfoSphere MDM Standard Edition (SE) version 11 achieved GA in June 2013. IBM's total MDM software revenue in 2012 (estimated for all products and domains) was $311.6 million, of which $71 million was for SE for customer data. IBM's total MDM customer count in March 2013 (estimated for all products and domains) was over 800, of which 350 were for SE for customer data. Strengths Broad IM strategy: At IBM, MDM is central to a much broader big data and information management (IM) strategy and platform. This is attractive for larger organizations looking to source a wide range of IM capabilities from one vendor. Unique offering: SE is a robust product oriented around a registry-based implementation style with an attributed, extensible data model and powerful matching and data management functions; it has a large roster of satisfied clients. Strong performance and industry focus: SE has strong proof points for extremely high volumes of business-to-consumer (B2C) data, with subsecond latency and high transaction rates. SE is very strong in the healthcare market where registry is a common requirement, and it continues to do well in the government sector where complexity in application landscapes lends itself to the registry style. Cautions Momentum slowing: IBM's overall MDM software revenue growth slowed to an estimated 3.5% in 2012, spread evenly across all data domains, and estimates suggest that revenue growth slowed significantly for SE. Limited implementation: SE is limited to the registry style. Users needing other styles should consider IBM's AE or other vendors' offerings. Reference survey concerns: References gave SE below-average scores for industry understanding, new feature responsiveness, pricing transparency, workflow and reporting.
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Informatica
Informatica (www.informatica.com) is headquartered in Redwood City, California, U.S. Informatica's MDM 9.6 achieved GA in June 2013. Informatica's total MDM software revenue in 2012 (estimated) was $85 million, of which $70 million was for customer data. Informatica's total MDM customer count in March 2013 (estimated) was 259, of which 245 were for customer data and 180 were for multiple data domains. Strengths Multidomain and broad IM capabilities: Informatica MDM is party-data-oriented, but can readily model other data domains. Reference customers cite data model flexibility as its main strength. A planned end-of-2013 release will eliminate database management system stored procedures, providing database independence. Informatica has highly rated data quality and data integration tools. Continued investment: In 2012 and 2013, Informatica acquired Data Scout, now positioned as the Informatica Cloud MDM solution, though this supports only the salesforce.com platform; Heiler Software, an MDM of product data vendor; and Active Endpoints, a vendor of business process management software (BPMS). Informatica also continues to invest substantially in core MDM development. Recovered momentum: Following early missteps, Informatica has recovered to be considered in twice the proportion of competitive situations of any other vendor, as reported by all survey respondents for this Magic Quadrant. At just under 7%, its revenue growth in the customer data market in 2012 was above the market average, though less than in 2011.

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Cautions

Magic Quadrant for Master Data Management of Customer Data Solutions

Portfolio strategy: Informatica's "Universal MDM" vision, including its Heiler acquisition, is still emerging. The company must act decisively to avoid having a "disparate MDM products" message used against it by megavendors, which are resolving this issue in their own portfolios, and smaller competitors. Lack of packaged governance technology for MDM: Informatica has opted to market the use of its current product suite to enable master data governance. Organizations that desire a packaged solution to master data governance should ensure they understand Informatica's approach.

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Oracle (CDH)
Oracle (www.oracle.com) is headquartered in Redwood Shores, California, U.S. Oracle's Customer Data Hub (CDH) version 12.2 achieved GA in September 2013. Oracle's total MDM software revenue in 2012 (estimated for all products and domains) was $243 million, of which $28 million was for CDH. Oracle's MDM customer count in March 2013 (estimated for all products and domains) was 1,550, of which 360 were for CDH. Strengths Strong MDM portfolio: Oracle has a broad range of MDM assets for multiple domains and use cases. Revenue growth for MDM of customer data was an estimated 10% in 2012. Good fit for E-Business Suite clients: CDH is sold to users of Oracle's E-Business Suite applications, and appeals to B2B-oriented users and others with modest data volumes. Good packaged data model and improving functionality: Oracle CDH has a rich party data model, derived from the E-Business Suite. CDH is increasingly drawing on more components of Oracle Fusion Middleware and the evolving standard MDM technology platform. Cautions Restricted positioning: Sales of CDH are generally restricted to E-Business Suite users. Siebel Universal Customer Master (UCM) is Oracle's lead MDM offering for customer data; with Fusion MDM slowly ramping up, CDH has virtually disappeared from our client interactions. Lagging functionality: CDH has fallen behind Siebel UCM and best-in-class vendors in a number of areas, including data quality technology, data governance facilities and hierarchy management. Reference survey concerns: As for 2012's Magic Quadrant, Oracle did not submit references for CDH. In prior years, multiple reference customers reported performance issues when mastering over 100,000 customer records in the hub.
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Oracle (Siebel UCM)

Oracle (www.oracle.com) is headquartered in Redwood Shores, California, U.S. Oracle's Siebel Universal Customer Master (UCM) version 8.2 81110FP achieved GA in March 2013. Oracle's MDM software revenue in 2012 (estimated for all products and domains) was $243 million, of which $82 million was for UCM. Oracle's MDM customer count in March 2013 (estimated for all products and domains) was 1,550, of which 330 were for UCM. Strengths Strong MDM portfolio: Oracle has a range of MDM solutions spanning multiple domains and industries. Revenue growth for MDM of customer data was an estimated 10% in 2012. Lead Oracle offering: UCM is Oracle's lead product for MDM of customer data. New features include Open UI for UCM and improved integration with Oracle's Enterprise Data Quality Management (EDQM) suite. Reference customers awarded high scores for UCM's road map visibility and support for multiple styles of MDM. Strong verticalization and scalability: UCM supports Oracle's Customer Experience (CX) strategy and has versions supporting several industries. It has live transactional workloads managing more than 100 million consumers. Cautions Unclear direction: Fusion MDM is not sold aggressively for MDM of customer data; prospective customers are uncertain whether to invest in UCM or Fusion MDM. Fusion MDM did not earn sufficient revenue in 2012 to be included in this analysis. Not designed for multidomain: Siebel UCM is based on a packaged party model; although it is robust and extensible, its architecture often excludes it from multidomain evaluations. Requires high-level vendor support: Some reference customers reported that securing access to UCM's product management team at Oracle was a critical success factor for their implementation.
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Orchestra Networks
Orchestra Networks (www.orchestranetworks.com, www.smartdatagovernance.com) is

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headquartered in Paris, France. Orchestra's EBX5 version 5.4 achieved GA in October 2013. Orchestra's MDM software revenue in 2012 (estimated) was $10.7 million, of which $5.3 million was for customer data. Orchestra's MDM customer count in March 2013 (estimated) was 90, of which 37 were for customer data. Strengths Strong sales momentum: Orchestra's revenue grew by 26% in this market segment in 2012 as it targeted multidomain scenarios, many of which were distinctive within the market. A cloud-based option is available. Robust capabilities: EBX5 has flexible browser-based data modeling facilities. It supports XML-based and relational schemas in a single hub. Reference customers gave EBX5 high scores in almost every category except data quality reporting. Supports specialized scenarios: In addition to reference data and hierarchy management, Orchestra targets specialized multidomain scenarios commonly found in organizations with B2B business models. Cautions Narrow marketing strategy: By targeting niche scenarios, Orchestra has implicitly ceded mainstream implementations to competitors, when its offering should be quite attractive in those areas. Risky sales strategy: Orchestra often sells MDM solutions to function-specific business users in the belief that these efforts lead to broad IT adoption. This strategy runs a high risk against larger competitors that are more enterprise-oriented. Product and partner strategy: Orchestra needs to develop starter templates (data models and services, UIs, configured rules and metrics) to compete with larger rivals. This requires a mature partnership model; so far, Orchestra has partnered on an opportunistic basis.
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SAP (MDG-C)
SAP (www.sap.com) is headquartered in Walldorf, Germany. SAP's Master Data Governance for Customer (MDG-C) version 6.1 achieved GA in December 2012. SAP's MDM of customer data software revenue in 2012 (estimated) was $30 million, of which $25 million was for MDG-C as a stand-alone hub. SAP's MDM customer count in March 2013 (estimated) was 2,300 licenses, of which 1,600 were active, 930 were for customer data and 280 used MDG-C as a stand-alone hub. Strengths Broad portfolio: SAP sells NetWeaver Master Data Management (for consolidation), MDG (for centralized) and Information Steward for stewardship support. An MDG Enterprise Edition is planned for Hana-based customer data in 2014. Product fit/flexibility: MDG-C is based on the Advanced Business Application Programming (ABAP) programming language, unlike NetWeaver MDM. Users can support ERP data management by implementing MDG "inside" Enterprise Central Component (ECC), or "outside" (but integrated with) ECC as an MDM hub, extending the data model for non-SAP data. Momentum within client base: The share of SAP customer MDM sales attributed to MDG-C grew from 20% in 2011 to 90% in 2012. The largest portion of this 90% is associated with MDG-C operating as an MDM hub, as opposed to directly against an ECC ERP system. Cautions Sells primarily to SAP's ERP installed base: MDG-C is not sold as a stand-alone or best-ofbreed MDM offering. This is therefore a self-imposed niche market segmentation. Narrow implementation style support: MDG-C is not appropriate for the consolidated style of MDM, and NetWeaver MDM is excluded from this year's analysis due to a substantial slowdown in revenue. Until MDG Enterprise Edition becomes available and proven, clients needing consolidation-style MDM face a difficult decision due to the loss of momentum of NetWeaver MDM for customer data and the necessity to include SAP Data Services to support this style of MDM with MDG. Reference survey concerns: Although interest and uptake appear high, SAP identified very few reference customers for MDG-C. This may not be entirely attributable to the product itself, as such a situation often indicates a difficult or complex implementation cycle, frequently involving multiple data domains.
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SAS
SAS (www.sas.com) is headquartered in Cary, North Carolina, U.S. SAS's Master Data Management version 3.2 achieved GA in December 2012. SAS's total MDM software revenue in 2012 (estimated) was $8.6 million, of which $4.2 million was for customer data. SAS's MDM customer count in March 2013 (estimated) was 292, of which 134 were for customer data, 78 of which were using SAS Master Data Management. Strengths Strong internal integration focus: DataFlux qMDM is now SAS Master Data Management, and a clear investment is being made to integrate it with other SAS products, such as Analytics, Business Data Network, Data Governance and Customer Intelligence.

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Graduated approach: SAS offers an incremental approach: data quality and integration tools for custom builds; batch-based MDM for one domain with Master Data Foundations; and two levels (Standard and Advanced) of SAS Master Data Management. Solid foundation: SAS Master Data Management has a flexible data model that can model multiple data domains, though it has the most experience with customer data. It has excellent data quality and data profiling facilities, and includes a business rule engine.

Cautions Slowing momentum: Revenue growth in 2012 was negligible in a market that grew by 5.4%. Similarly, SAS had little presence in Gartner's client interactions. Internal focus: SAS has recently focused on integrating DataFlux technology into its larger suite, which may leave it behind its MDM competitors in the short term in areas such as industry templates, data visualization and big data. Reference survey concerns: A below-average number of SAS reference customers responded to Gartner's survey, and although SAS received high scores for data quality capabilities and new feature responsiveness, it received low scores for workflow and initial load support, and for scalability. Enhancements in the MDM release planned for the fourth quarter of 2013 appear to target these concerns.
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Talend
Talend (www.talend.com) is headquartered in Paris, France and Los Altos, California, U.S. Talend's Platform for Master Data Management version 5.3 achieved GA in June 2013. Talend's total MDM software revenue in 2012 (estimated) was $8.2 million, of which $5.1 million was for customer data. Talend's total MDM customer count in March 2013 (estimated) was 63, of which 38 were for customer data. Strengths Broad IM vision: Talend has a broad platform, including highly rated data quality and integration tools. It can model multiple data domains in the same product. It acquired enterprise service bus vendor Sopera in 2010 and began an OEM relationship with BPMS vendor BonitaSoft in 2011. Increasing revenue and mind share: Talend earned $5 million from the MDM of customer data market segment in 2012, up from virtually none in 2010. It submitted a full set of survey reference customers, which achieved an above-average response rate, and was cited in 10% of competitive situations by the survey respondents for all vendors. Attractive prices and model: Talend uses a subscription model. Its average selling price is well below the market average, and users can download a free open-source version with limited features. Cautions Overall profitability: Although it has significant cash reserves and committed investors, Talend does not expect to be profitable until sometime in 2013. This may affect its ability to maintain necessary internal investment, should its planned trajectory not be achieved. Technical orientation: Several clients and survey respondents describe Talend's software as unsuitable for business users. Low scores were given for industry knowledge and road map visibility. Software flexibility and stability: Reference customers reported stability issues and a lack of configurability with Talend's data stewardship UI; however, several gave high marks for Talend's efforts to solve these issues.
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Tibco Software
Tibco Software (www.tibco.com) is headquartered in Palo Alto, California, U.S. Tibco's MDM version 8.3 achieved GA in March 2013. Tibco's total MDM software revenue in 2012 (estimated) was $52.8 million, of which $15.2 million was for customer data. Tibco's total MDM customer count in March 2013 (estimated) was 270, of which 106 were for customer data. Strengths Strong momentum: Tibco's revenue in this market segment grew by an estimated 25% in 2012, and its number of licenses doubled. Tibco continues to draw on its application integration base. It is building a dedicated MDM implementation staff and a set of industry starter templates. Increased presence: Traditionally stronger in product data, Tibco is aggressively targeting the customer data market segment, and seeing results. Though still relatively low, its visibility in competitive situations has also increased. Product strategy: Tibco has solid multidomain and data modeling capabilities; visual MDM is a differentiating feature for data quality reporting with a Spotfire runtime license. Tibco's inmemory caching and use of tibbr for internal "social MDM" and governance are attractive. Reference customers gave Tibco high scores in almost every category. Cautions

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Emphasis on IT aspect: Reference customers and users of Gartner's inquiry service report an IT-focused sales and implementation process, with little attention paid to the business ownership aspects of MDM programs. Tibco will need to engage business stakeholders effectively to remain competitive. Failure to market differentiators: Reference customers gave Tibco low scores for data quality reporting, and clients seeking Gartner's advice when evaluating Tibco have not mentioned its visual MDM. Given Tibco's capabilities, this indicates a lack of appropriate marketing or upgrade incentives. Maintenance of focus: Given its rapid growth, Tibco may find it challenging to support MDM of customer data and product data implementations with its current level of experienced resources.

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VisionWare
VisionWare (www.visionwareplc.com) is headquartered in Glasgow, Scotland, U.K. VisionWare's MultiVue version 3.2 achieved GA in October 2012. VisionWare's total MDM software revenue in 2012 (estimated) was $5 million, of which $4.7 million was for customer data. VisionWare's total MDM customer count in March 2013 (estimated) was 94, all of which were for customer data. Strengths Excellent fit for Microsoft users: VisionWare's products are attractive to Microsoft-centric organizations. MultiVue is based solely on Microsoft technologies, such as .NET, SQL Server and BizTalk. Attractive prices and models: VisionWare offers perpetual and subscription licensing and special public sector pricing. Its average selling price is well below the market average for both public and private sectors. Reference customers gave the company high scores for pricing transparency. Solid customer data capabilities: VisionWare has released a product called Auris to perform MDM functions within Microsoft's Dynamics environment, and has included an integration facility for reference data in its latest release. Reference customers gave VisionWare high scores for most standard MDM capabilities. Cautions Continued flat revenue: VisionWare's revenue showed little or no revenue growth in 2011, and this trend continued in 2012. No multidomain vision: VisionWare has deep experience in domains such as customer and citizen data, and MultiVue can model other domains, but the vendor has not articulated a vision beyond its current niches. Reference survey concerns: VisionWare achieved a low survey response rate and low scores for its rate of technology innovation, data model flexibility and data quality facilities.
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Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.
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Added
Talend Talend is an open-source vendor and its commercial MDM solution, Talend Platform for Master Data Management, uses open-source technology, including the company's own data integration and data quality products. In the past there has been some interest in Talend's free, downloadable Open Studio for MDM, but this year Talend met the inclusion criteria with its commercial offering, based on revenue attributable to MDM of customer data and a full set of responsive implementation references.
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Dropped
SAP (NetWeaver MDM) Although this product is still included in this year's forthcoming "Magic Quadrant for Master Data Management of Product Data Solutions," SAP's emphasis in regard to MDM of customer data has shifted to the newer MDG-C product and the Hana-based MDG Enterprise Edition, the latter currently scheduled, we estimate, for release in 2014. This change in marketing and sales strategy has resulted in a reported revenue level for NetWeaver MDM that is lower than the minimum required for inclusion in this Magic Quadrant.
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Inclusion and Exclusion Criteria

Inclusion Criteria
For inclusion in this Magic Quadrant, vendors were required to have: Generated at least $4 million in total software revenue (licenses and maintenance) related to MDM of customer data solutions, primarily supporting operational business processes, in the prior calendar year Active sales and support activities globally that is, in at least two of the following regions: Americas, Europe, the Middle East and Africa, Asia and Australasia Active sales, support and customers in multiple industries We also collect and/or estimate additional data to ascertain the level of activity and stability of each vendor in the market, though not as part of the inclusion criteria. We looked for: At least 12 live customer references for MDM of customer data solution functionality At least eight new customers for MDM of customer data solutions in the prior calendar year Sufficient professional services to fulfill customer demand during the next six months Enough cash to fund a year of operations at the current "burn rate" (companies spend their cash reserves if a year of operations is cash-flow-negative)
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Multiple Products
Vendors may have multiple products in the MDM of customer data solutions market. Where end users report a notable difference between them, each product is evaluated separately against these inclusion criteria. On this basis, the following vendors offer multiple products and are evaluated separately: IBM: two products, both qualified and included in the analysis Oracle: three products, two qualified and included in the analysis SAP: two products, one qualified and included in the analysis The following vendors offer multiple products, but some of these products did not qualify for inclusion and are therefore not analyzed other than from the perspective of being of strategic importance to a vendor's MDM product strategy: Oracle: Fusion Customer Hub did not meet the inclusion criteria for revenue SAP: NetWeaver MDM no longer meets the inclusion criteria for revenue attributable to MDM of customer data solutions and has therefore been dropped
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Exclusion Criteria
This Magic Quadrant excludes the following because they are either tangential to the main focus of MDM programs (mastering data within the organization) or so new that they have yet to affect onpremises MDM deployments: Vendors that focus solely on analytical (downstream) MDM requirements. We use only revenue from operational MDM installations for qualification, since this is where the bulk of MDM effort goes. Vendors reselling another vendor's MDM of customer data solution without extending its functionality. Likewise, royalties from an OEM or resale by another vendor are not credited to the provider of the OEM technology; original software revenue from the end-user acquisition is credited to the reselling vendor. Hosted and cloud-based services, marketing service providers and data providers that provide trusted reference data external to the enterprise but do not provide an MDM of customer data solution that specifically meets Gartner's definition.
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MDM of Customer Data Solution Product Description

This market is characterized by packaged software solutions that bring together a range of technologies and capabilities that help sustain the idea of a "single golden record" for customer master data. This is the primary focus of this analysis. The range of functional capabilities included in these products includes: Data modeling capabilities The applicability of the data model to your organization is a fundamental requirement. It must: Model the complex relationships between the application sources inside the organization and its products and services, as well as with intermediaries and other parties, with the ability to handle complex hierarchies.

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Map to the master customer information requirements of the entire organization. Be configurable, customizable and extensible, but also upgradable. Support industry-specific requirements, as well as multiple hierarchical and aggregated views associated with customer data structures related to consumer systems, and so on. This is particularly important across operational and analytical MDM requirements. Provide a base for the required workload mix and level of performance. Be expressed using commonly accepted logical data model conventions with associated metadata. Manage data, business rules, sources, ownership and so on for data governed by the MDM program using flexible, dynamic and business-consumable metadata management capabilities. Information quality management/semantic capabilities A good data model is of little value unless it contains accurate, up-to-date and semantically consistent data for a customer. The MDM of customer data solution should: Have strong facilities, in batch and real-time modes, for profiling, cleansing, matching, linking, identifying and semantically reconciling customer master data in different data sources to create and maintain a "golden record." These facilities may be provided by the MDM of customer data solution vendor or by offering tight integration with products from specialist data quality partners. Configure business and data rules for comparing, reconciling and enforcing semantics across data sources, matching and linking the data, and managing the merging and unmerging of records with support for full auditability, survivability and data lineage. Ensure that business, rules and associated metadata related to data cleansing is sufficiently visible to satisfy compliance requirements. Business services, integration and synchronization capabilities The MDM of customer data solution needs to provide facilities for loading customer data in a fast, efficient and accurate manner. There will also be a need for integration middleware, including publish and subscribe mechanisms, to provide a communication backbone for the bidirectional flow of customer data between the central repository and the spoke systems, be they copies or subsets of the repository, or remote applications (coexistence style). Many organizations will also plan to use the new customer master database as the basis for new operational (both transaction and workflow-oriented) and analytical applications. In the service-oriented architecture (SOA) world of enterprise architecture, service-oriented composite business applications may consume MDM of customer data solution business services through Web services' standard interfaces.

These facilities may be provided by the MDM of customer data solution vendor or through tight integration with products from specialist middleware partners. The MDM of customer data solution should support, as necessary, the MDM implementation styles, which each use loading, integration and synchronization in different ways, by being able to: Leverage a range of middleware products to connect to data sources, including legacy data sources, and expose industry-standard interfaces. Support integration with different latency characteristics and styles for example, real time and batch. Support integration with downstream business intelligence and analytical requirements. Support flexible and comprehensive business-services-based capability in order to model data services as well as user interactions across applications and data stores where master data is stored and used. Business process management (BPM) and workflow design and management capabilities Customer master data will permeate a range of business applications across systems and geographies. Successful MDM programs require a strong, business-outcome-driven process understanding of where and when master data is required in order to ensure the integrity of business processes. MDM of customer data solutions do not need to include BPMS technology, but they do need to interoperate with third-party BPMS solutions in order for their stewardship (enforcement) and integration (services) capabilities to be consumed in actual business process orchestrations. A suggested range of necessary capabilities includes ones to: Model, consider or recognize a business process model at a conceptual, logical and physical level in order to identify a conceptual, logical and physical data model in support of the same. Document and understand that is, diagnose the flow of master data across business systems, applications and processes. Design, orchestrate and manage a business-level and data-level workflow between any MDM hub and business systems that subscribe to the necessary information infrastructure. Support analytics, key performance indicators and benchmarking for an "as is" version of business processes and their outcomes, as well as workflows within them; also, to support a "to be" version for business process and data models. Performance, scalability, availability and security capabilities If the MDM of customer data solution supports operational and analytical applications and is tightly integrated with established systems and new applications, serious demands are likely to be made on its performance, scalability and availability. The MDM of customer data solution should have: Proof points, preferably through live references, of different aspects of performance and scalability that match your current and future requirements.

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Appropriate availability characteristics regarding planned and unplanned downtime. On the security and data privacy management front the ability to: Manage the policies and rules associated with potentially complex privacy access rights Configure and manage different rules of visibility, providing different views for different roles Stewardship support and services The MDM of customer data solution needs to support a range of capabilities, from information policy evaluation through to the day-to-day operation and management of MDM. Governance roles focus on policy setting, steward roles on policy enforcement. The resulting focus of this functionality will be the role of the (business-led) data steward and governance roles. Among the different user roles that interact with MDM, the data steward and governance roles require a suitable UI whereby these services are provided. These services will include, but not be limited to: Design and impact assessment of information policy pertaining to business or systemwide authority for data. Analytics and performance measures related to a range of processes and activities taking place within MDM, from running batch data loads to executing workflows against benchmarks, assessing the quality of active master data, running business process benchmarks, and measuring the business value provided by MDM. Status and management tools for the steward and governance roles to monitor to-do lists of users to ensure effective action takes place across the MDM landscape. Systemwide master/meta models to help identify which users, roles, applications and systems are responsible for which master data, and the state of the master data and/or business rules that are generating exceptions in that data. Workflow services to interrogate and provide revisions to current MDM workflows. Business rules services to interrogate which rules are used by MDM and provide suggested enhancements to such business rules; these are also used to determine under which circumstances source preference is revised to give preference to the most dependable source. Full, business-consumable audit trail information to identify past changes to information. A range of user interfaces on PCs, smartphones and tablets. Technology and architecture considerations MDM of customer data solutions should be based on up-to-date, mainstream server, PC and mobile device technologies, and be capable of flexible and effective integration with a wide range of other application and infrastructure platform components whether from the same vendor or not within end-user organizations.

An MDM of customer data solution should be capable of: Flexible configuration into a range of implementation styles in terms of instantiation, latency and use of customer master data to enable it to satisfy different use case scenarios, such as the consolidation, registry, coexistence and centralized scenarios. Architecturally supporting global rollouts and localized international installations. Supporting both on-premises and cloud deployment styles, including SaaS. Supporting integration with big data sources, such as social networks, and performing entity resolution within those sources, whether relational or nonrelational, and whether data is structured or unstructured.
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Evaluation Criteria
Ability to Execute
Gartner analysts evaluate technology providers on the quality and efficacy of the processes, systems, methods or procedures that enable IT providers' performance to be competitive, efficient and effective, and to positively impact revenue, retention and reputation. Ultimately, technology providers are judged on their ability and success in capitalizing on their vision. Product or Service: Software products offered by the vendor that compete in/serve the MDM of customer data solutions market segment. This includes product capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements and partnerships as defined in the market definition and detailed in the subcriteria. Vendors are measured on the ability of their products to support the following MDM of customer data solution subcriteria: Data modeling capabilities Information quality and semantic capabilities Business services, integration and synchronization Workflow and BPM capabilities Performance, scalability, security and availability capabilities Stewardship support and services Technology and architectural considerations

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Overall Viability: Viability includes an assessment of the MDM of customer data solution vendor's financial health, the financial and practical success of the business unit or organization in generating business results in the MDM of customer data solutions market segment on a global basis, and the likelihood that the organization or individual business unit will continue to invest in development of the product, offer the product and advance the state of the art within the organization's product portfolio. Sales Execution: A vendor's capabilities in all MDM of customer data solutions-related presales activities on a global basis, and the structure that supports them. This includes deal management, pricing and negotiation, presales support and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customers' needs evolve and market dynamics change within the MDM of customer data solutions market segment. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the vendor's message on a global basis, in order to influence the MDM of customer data solutions market segment, promote the vendor's brand and business, increase awareness of its products, and establish a positive identification with its product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. Customer Experience: Relationships, products and services/programs that enable clients to be successful on a global basis with the products evaluated. This includes implementation and support, and the way customers receive technical and account support. It also includes measures of clients' success in implementing MDM for customer data solutions: customer references and TCO. With the increasing hype about multidomain MDM, we also look for demonstrated proof via proof of concepts, customer evaluations and live implementations of multidomain/multiprovince capability. Operations: The provider's ability to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. This criterion was not explicitly rated, but was rolled into the Overall Viability, Sales Execution/Pricing and Marketing Execution criteria.

Table 1. Ability to Execute Evaluation Criteria

Criteria Product or Service Overall Viability Sales Execution/Pricing Market Responsiveness/Record Marketing Execution C ustomer Experience Operations Weight High High High High High High Low

Source: Gartner (October 2013)

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Completeness of Vision
Gartner analysts evaluate technology providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and how well they map to Gartner's position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunity for the provider. Market Understanding: A vendor's ability to understand buyers' needs and translate these needs into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those wants with their added vision. Vendors should demonstrate a strategic understanding of MDM for customer data solution opportunities (for example, new application functionality or customer segments) and ongoing vendor market dynamics (for example, consolidation trends) on a global basis, and translate that understanding into products and services. Additionally, we consider a vendor's understanding of the wider implications of, and the position of MDM in relation to, other kinds of master data within an organization's multidomain, multiuse case and multi-implementation style program; an understanding of the relationship to enterprise information architecture and EIM initiatives is also valuable for customers taking a strategic view. Marketing Strategy: A clear, differentiated set of MDM of customer data solution messages consistently communicated throughout the organization and externalized globally through a website, advertising, customer programs and positioning statements. Intersection with multidomain

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MDM and wider MDM and industry challenges, as expressed by Gartner clients, is important. Sales Strategy: A vendor's strategy for selling an MDM of customer data solution that uses its, or a partner's, global network of direct and indirect sales, marketing, service and communication affiliates to extend the scope and depth of its market reach, skills, expertise, technologies, services and customer base. Offering (Product) Strategy: A vendor's approach to product development and delivery, which should emphasize differentiation, functionality, methodology and feature set as they map to current and future requirements. A vendor's published "statement of direction" (or Gartner's understanding thereof) for the next two product releases needs to keep pace with or surpass Gartner's vision for the MDM of customer data solution market segment. Gartner's main product-oriented criteria focus on: Data modeling capabilities Information quality and semantic capabilities Business services, integration and synchronization Workflow and BPM capabilities Performance, scalability, security and availability capabilities Stewardship support and services Technology and architectural considerations Each vendor needs to offer an MDM of customer data solution that can be configured into a range of architectural styles, in terms of instantiation, latency, search and usage of customer master data, to enable it to satisfy different use case scenarios, such as the consolidation, registry and centralized style scenarios, and leading to hybrid models such as the coexistence style. Each vendor needs to show how its MDM of customer data solution supports a wide range of use cases, from business design (construction-centric MDM) to business operations (operational MDM) and business intelligence (analytical MDM). Most vendors focus on one use case, so they need to demonstrate how they intend to support the growing convergence in requirements across use cases. Each vendor must also understand major technological and architectural shifts in the market, and communicate a plan to leverage them, including migration issues that may affect customers on current releases. Specifically, the vendor should have a vision to support mainstream software infrastructure technology, as opposed to a proprietary stack, and have an evolutionary path toward SOA. Business Model: The soundness and logic of an MDM of customer data solution vendor's underlying business proposition. Vendors should have a well-articulated strategy for revenue growth and sustained profitability. Key elements of strategy include the sales and distribution plan, internal investment priority and timing, and partner alliances, such as with external service providers. Vertical/Industry Strategy: A vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including industries. Included are reviews of the vendor's strategy for meeting the needs of specific industries, such as banking, manufacturing, communications and government. Innovation: Vendors need to be able to lead this market and, in so doing, provide customers with an innovative solution and approach to meet customers' needs in a complex, heterogeneous environment. Innovation implies leading the way with MDM of customer data issues both today and in the future. We looked for understanding of, and support for, the most complex and broadest MDM of customer data environments and the growing requirements of multidomain and multi-usecase MDM in general. New this year is a focus on how vendors plan to support key initiatives such as the cloud, social data and other kinds of big data, and mobile communications in the context of MDM. Geographic Strategy: A vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside its native geography, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market. This includes sales, marketing and support for complex global companies.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Weighting High High Medium High Medium High High

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Source: Gartner (October 2013)

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Quadrant Descriptions
Leaders
Vendors in the Leaders quadrant have strong results and strong delivery capabilities, and will continue to have them. They typically possess a large, satisfied customer base (relative to the size of the market) and enjoy high visibility in the market. Their size and financial strength enable them to remain viable in a challenging economy. Leaders have mature offerings and track records of successful deployments, even in the most challenging environments, across all geographies and in many industries. Leaders have the strategic vision to address evolving client requirements; however, they are not always the best choice.
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Challengers
Challengers demonstrate a clear understanding of today's MDM of customer data solutions market segment, but they have either not demonstrated a clear understanding of the market's direction or are not well-positioned to capitalize on emerging trends. They often have a strong market presence in other application areas. There are no Challengers in 2013's Magic Quadrant. The MDM of customer data solutions market segment is increasingly being impacted by the gradual formation of requirements centered on multidomain MDM in other words, single solutions that can be used for any number of data domains. This influence was very slight five years ago. Every year it has increased, however, and as a result the positions of vendors in this year's Magic Quadrant have been "elongated" from lower left to upper right in Figure 1. Assuming the multidomain MDM market emerges, the MDM of customer data solutions market segment may no longer need to meet those multidomain requirements, so the requirements of future issues of this Magic Quadrant may focus more on the single domain, in which case the positions of the vendors in Figure 1 are likely to spread out. The effect of the current level of ancillary interest in multidomain capabilities by users of MDM of customer data solutions can be seen in this year's Magic Quadrant reference survey, where 43% of respondents voiced interest in noncustomer domains, but only 29% actually formally evaluated those capabilities prior to purchase.
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Visionaries
Visionaries display healthy innovation and a strong potential to influence the direction of the MDM of customer data solutions market segment, but they are limited in execution or demonstrated track records. Typically, their products and market presence are not yet complete or established enough to merit Leader status. There are no Visionaries in this year's Magic Quadrant.
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Niche Players
Niche Players do well in specific segments of the MDM of customer data solutions market segment, or have a limited ability to be innovative or outperform other vendors in this segment. They may be focused on a specific functionality, domain or industry, or have gaps in relation to broader functionality requirements. Niche Players may have limited implementation and support services, or they may not have achieved the scale necessary to solidify their market positions.
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Context
This Magic Quadrant offers insight into the part of the packaged MDM solution market that focuses on how organizations master and share a "single version" of customer data with multiple views of it across their organizations achieving a single version of master data is a key initiative for many organizations. In this Magic Quadrant "customer data" is defined as including consumers, business customers, channel/trading partners, prospective customers, citizens, constituents, people of interest, healthcare professionals, patients and counterparties; it excludes other parties, such as human resources and suppliers. This analysis positions MDM of customer data solution vendors (and their offerings) on the basis of their Completeness of Vision relative to the market segment, and their Ability to Execute on that vision. Use this Magic Quadrant to understand the MDM of customer data solutions market segment, and how Gartner rates the vendors (and their offerings) in this segment. Study this research to evaluate vendors by a set of objective criteria that you can adapt to your particular situation. Gartner advises organizations against simply selecting vendors in the Leaders quadrant. All selections should be buyer-specific, so vendors from the Challengers, Niche Players and Visionaries quadrants might be better matches for your requirements. See "How Gartner Evaluates Vendors and Markets in Magic Quadrants and MarketScopes." Although important, selecting an MDM for customer data solution is only part of the MDM challenge.

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To succeed, you should put together a balanced MDM program that creates a shared vision and strategy, addresses governance and organizational issues, uses appropriate technology and architecture, and creates the necessary processes and metrics for your customer data system (see "The Seven Building Blocks of MDM: A Framework for Success" and "The Five Vectors of Complexity That Define Your MDM Strategy").
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Market Overview
The Need for a Single View of the Customer
Business drivers for creating a single view of the customer include: Compliance and risk management drivers, such as "know your customer," anti-moneylaundering and counterparty risk management in the banking sector, and Sunshine Act compliance in the life sciences sector. Associated initiatives tend to have concrete benefits and they are mandatory. Cost optimization and efficiency drivers. Very often these drivers are associated with business transformation initiatives and end-to-end business process improvement programs. These have tangible benefits and are a good fit for organizations' needs during an economic downturn. Revenue and profitability growth drivers. Examples are initiatives to improve cross-selling, upselling and retention. CEOs, chief marketing officers and CIOs are placing increased emphasis on improving the customer experience through an accurate and complete understanding of customers' interactions with their enterprises. These drivers can be more difficult to measure, but are a major focus when the economy is going well. However, most large enterprises have heterogeneous application and information management portfolios, with fragments of often inaccurate, incomplete and inconsistent data residing in various application silos. No single system contains this single view of the customer or is designed to manage the complete life cycle of customer master data. The ability to create, maintain and draw on a single, trusted, shareable version of customer master data is increasingly seen as an essential requirement in commercial and noncommercial organizations to support business processes and business decision making. When creating and managing customer master data, many organizations and vendors originally thought that CRM, ERP or industry application systems would solve the problem of inconsistent master data spread across multiple systems; however, CRM, ERP and industry systems were not designed for that task, and often there are multiple CRM or ERP systems in an enterprise. Many organizations have now invested in creating a new central system to master their customer data, with the majority (an estimated 80%) of organizations buying packaged MDM of customer data solutions, as opposed to building the capability themselves. Organizations in different industries have different business models, and therefore their MDM efforts vary (see "The Five Vectors of Complexity That Define Your MDM Strategy"). Some organizations have a customer base of millions of consumers, such as high-volume B2C organizations. Others have a base of thousands or tens of thousands of customers, such as lowervolume, but more complex, B2B organizations. This has implications for the MDM implementation style (see "The Important Characteristics of the MDM Implementation Style"). In a high-volume B2C organization, customer data is typically authored in a distributed fashion in existing applications. In this case, the MDM "journey" may start with either registry-style indexing in the central hub or a physical consolidation into the central hub, potentially followed by publishing from the hub to harmonize the different application systems in a coexistence style. Some organizations reach their intended goal by coupling hub-and-spoke systems more tightly with transactional access to the hub where central authoring takes place. The B2B requirement also often leads to central authoring, but on the basis of a collaborative workflow. Our Magic Quadrant reference survey (see Note 2) found that 29% of respondents followed the centralized approach in 2013, up from 20% in 2012. The coexistence style, where the authority model is shared between the MDM hub and its source operational systems, was adopted by 13% of respondents, up from 12% in 2012. The consolidated style of MDM hub was reported by 40% of the respondents in 2013, up from 36% in 2012. Their customer master data store contained a reconciled copy of the master data from other authoritative sources. The percentage of those following the registry approach with their customer master data store consisting only of an index to the master data in other authoritative sources fell to 4%, from 9% in 2012. Hybrid approaches were reported by 13% of respondents, down from 21% in 2012.
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The Market Is Maturing Steadily but Still Has Some Way to Go

Momentum has been steadily building in this market during the past 10 years, during which time MDM vendors have sold over 2,500 copies of their MDM of customer data solutions. Moreover, MDM vendors that traditionally sold lead products in other disciplines (such as data quality or data integration) are now widely reporting sales driven primarily by MDM, with "pull-through" of other products in the same deals. In addition, the continued strong growth of the CRM market (see "Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update") bodes well for the future of MDM of customer data, as MDM commonly lags CRM implementations by a few years weakly managed CRM data quality can result in operational difficulties (such as salespeople

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redundantly calling the same prospective customer) that ultimately require an MDM implementation to solve. However, our survey for this Magic Quadrant found that the proportion of organizations that described their use of enterprisewide MDM of customer data as "well established" was down by 5% from 2012; the proportion that said they were "working toward" enterprisewide MDM of customer data held steady; and the proportion that described themselves as "having good MDM capabilities in some areas" grew by 9%. Despite its momentum, the market is still characterized by much immaturity. During interactions with users of Gartner's client enquiry service and one-on-one meetings with clients at Gartner events, approximately 40% of organizations have said they are just starting their MDM programs. Additionally, vendors of MDM of customer data solutions are still expanding their products in different directions, and new players continue to enter the market. In "Hype Cycle for Enterprise Information Management, 2013," we place MDM of customer data in the Trough of Disillusionment. This is actually a positive sign, as it shows that MDM of customer data is well past the initial hype and early adopter implementations, and is steadily gaining maturity, although it is not yet fully mature.
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Vendors Are Investing in Data Stewardship and Governance Technology

In terms of new MDM capabilities, vendors have been placing particular emphasis on adding or improving data stewardship and governance facilities, including data profiling, workflow, data visualization and manipulation, dashboards and reporting. In 2012, they introduced better UIs and workflows for business users, making greater use of business process management technology and MDM applets, which allow existing applications to use MDM-hub-based data. Across every aspect of MDM product, customer and multidomain stewardship tools are turning into solutions called information stewardship applications. This is an exciting trend as it shows the relevance of master data to business users in terms of business value and impact (see "The Emergence of Information Stewardship Applications for Master Data"). Organizations are applying stewardship applications more often to business data attributes beyond those in master data domains, to support data stewards in their data governance activities across varied data management initiatives. Although demand is still emerging, it is clear that early-adopter organizations recognize the value of these capabilities.
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The Nexus of Forces Creates Both Opportunities and Risks

Gartner calls the growing convergence of cloud, social networking, mobility and information trends the "Nexus of Forces" (see "The Nexus of Forces: Social, Mobile, Cloud and Information"). Organizations in the customer data MDM market are keeping a close eye on opportunities in these areas. Most organizations recognize there will be both a cultural and a technological shift, but are struggling to understand the impact this will have on their information environments and the required strategic responses (see "The Impact of Social and Other 'Big Data' on Master Data Management"). Organizations recognize that MDM is critical for accurate sentiment analysis in social networks, but it may take longer to implement than they are willing to wait. They also understand that it is more damaging to send unsuitable or redundant retail offers to a customer's smartphone than it is to send the same offers via postal mail here, again, the role of MDM comes to the fore. As expected, organizations have shown a high level of interest in social media and mobility as they relate to MDM of customer data. But they have shown a low level of interest in the cloud in connection with MDM in general. There are several reasons for this (see "Hype Cycle for Information Infrastructure, 2013"). Some organizations are using cloud MDM hub services in limited cases, such as rapid proofs of concept; however, the overwhelming preference is currently for on-premises implementations. Some vendors recognize the need to move from a "single view of customer truth" to a "single view of customer trust" and are establishing relevant product strategies to reflect this. But user organizations typically do not know how to react. As such, we believe there is a high risk that some user organizations will follow a tactical, technological (vendor-led) response to the impact of the Nexus of Forces, rather than a strategic one that would be of greater benefit to their business.
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Market Growth Continues and Several Portfolios Remain Complex

Gartner estimates that total software revenue for packaged MDM solutions was $1.6 billion in 2012, an increase of 7.8% from 2011, as compared with a 4.7% rise for the overall enterprise software market (see "Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update"). Within these overall figures we estimate that the MDM of customer data solutions market segment was worth $527 million in 2012, an increase of 5.4% from 2011. In "Forecast: Master Data Management, Worldwide, 2010-2015," we projected a five-year compound annual growth rate of nearly 20% for both the overall MDM software market and the MDM of customer data software market segment through 2015.

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We estimate that IBM is the market share leader in the MDM of customer data solutions market segment (based on sales of InfoSphere MDM SE and AE), with estimated total software revenue of $203 million in 2012. Oracle is in second place (based on sales of its Oracle CDH, Oracle Fusion Customer Hub and Siebel UCM products) with estimated revenue of $114 million in 2012. Informatica is in third place with estimated revenue of $70 million in 2012. SAP is in fourth place with estimated revenue of $30 million (based on sales of NetWeaver MDM and stand-alone hub deployments of MDG-C) in 2012. Tibco is in fifth place with estimated revenue of $16 million in 2012. Together, we estimate that these five market share leaders account for over 80% of the MDM of customer data solutions market segment. Unlike earlier years, the past year has not been characterized by acquisitions, except for Informatica's acquisition of Data Scout (and subsequently, product information management vendor Heiler and BPMS vendor Active Endpoints). But we continue to see the after-effects of acquisitions: the larger vendors continue to promote and execute convergence road maps to integrate formerly disparate product and technology mixes. Investment in MDM of customer data solutions continues to occur across all industries, including the government sector. Service industries (such as financial services and healthcare) and governments tend to focus on the customer data domain (except for some sectors of financial services that deal heavily with securities), whereas product-oriented industries tend to be interested in a wide set of data domains (such as product, supplier and customer). There is global interest and investment in MDM of customer data solutions, mainly by large enterprises. The MDM portfolios of the megavendors (IBM, Oracle and SAP) remain complex. This is largely a result of them trying to meet the initial multidomain demands of the MDM market. IBM continues to focus strongly on a convergence road map for its multiple products, and has begun substantial development relating to its vision for MDM linked with big data sources such as social networks. Oracle is also converging onto common middleware and MDM technology infrastructure, though sales execution and consequently market uptake of its Fusion MDM platform have been slow. SAP now has two products in this market segment NetWeaver MDM and MDG-C with a third, MDG Enterprise Edition, planned for 2014 for consolidation-style MDM, replacing the planned development of the Master Data Services (MDS) product. The capabilities originally planned for stand-alone MDS are being integrated with MDG capabilities and will be delivered as part of MDG Enterprise Edition. The smaller vendors have continued to make progress in diverse ways: Informatica has completed its acquisition of Data Scout for MDM of customer data stored in salesforce.com, and has produced versions of this software (now known as Informatica Cloud MDM) incorporating functionality from its on-premises MDM product. Additionally, in 2013, Informatica acquired Heiler Software, a vendor of MDM of product data solutions, to strengthen its multidomain credentials. Tibco Software continues steadily to increase its emphasis on MDM and is becoming more of a force in the MDM of customer data market segment. SAS is taking concrete steps to integrate the former DataFlux MDM solution with its broader suite of SAS data management products. VisionWare continues to provide a distinct Microsoft-based value proposition but remains focused on a limited set of industries, such as healthcare and the public sector. Orchestra Networks, which appeared in the Magic Quadrant for MDM of customer data solutions for the first time in 2012, is growing strongly in some targeted scenarios. Talend appears in this Magic Quadrant for the first time this year, after fully meeting all the inclusion criteria for revenue and implementation references. Other vendors, such as Ataccama, Information Builders, Kalido, Software AG and Teradata, are also active in this market segment, but their presence (though increasing in some cases) is not large enough in one or more respects for them to be included in this Magic Quadrant. Microsoft has not yet had a major impact on the MDM market with its SQL Server Master Data Services (MDS) technology, other than supporting end users' plans to "build" their own MDM solutions or being incorporated into third-party channel partners' solutions (for example, those of Profisee). While Microsoft's MDS toolset provides several capabilities expected of vendors in this Magic Quadrant, it does not provide the degree of out-of-the-box integration between those capabilities that is typical of an MDM software solution. Vendors that previously focused on managing product data, such as Riversand and Stibo Systems, started to adopt a more multidomain position in 2012 and to become more relevant to the MDM of customer data solutions market segment. Several of these vendors have developed an MDM of customer data implementation at one or more of their existing clients, capitalizing on established relationships. However, the revenue attributable to these efforts has yet to meet the inclusion criteria for this Magic Quadrant. There are many other vendors, some small, innovating in and around the field of MDM of customer data. Semarchy is a small French vendor focused on helping clients with an "evolutionary" approach to scaling MDM. Collibra is another small vendor, one that focuses more on the information stewardship side of MDM. Pitney Bowes has built an MDM solution based on the graph database paradigm and emphasizing geospatial capabilities. Dell Boomi has introduced a solely cloud-based platform. These and other vendors show that this market segment is vibrant and constantly evolving. We expect to see more acquisitions and new entrants in the next few years.

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Although the overall view of this year's Magic Quadrant appears similar to that of a mature software market, the complex nature of the MDM discipline has led to a situation in which there are still vendors entering the Magic Quadrant for the first time, and others potentially approaching entry. In addition, many vendors are now branching out to manage additional master data domains. Additionally, existing clients and prospective customers have become more educated about the depth and complexity of the expertise and management required by successful MDM implementations, and would seem more likely to rely on a market leader. However, there has also been a noticeable increase in interest during Gartner's interactions with clients (particularly at our MDM conferences) in vendors that can provide specific capabilities at more modest prices. As the overall market continues to grow, there are likely to be sufficient revenue opportunities to keep the Niche Players viable, but they will continue to face a challenge to enter the Leaders quadrant (or even the Challengers quadrant) due to the mind share of the current Leaders. The current absence of Challengers and Visionaries from this market segment is the result of multiple influences. The Leaders are successfully investing both in solidifying their offerings and creating synergies with ancillary markets such as social network data. This has caused several Niche Players to either define very targeted visions for their products in an as-yet-unfulfilled attempt to overtake the Leaders in those areas (thereby inhibiting their Completeness of Vision), or to imitate the investment behavior of the Leaders at the expense of their Ability to Execute. As these strategies unfold, and the requirements for multidomain capabilities mature (as described in the Challengers quadrant definition), the current vendors will spread into the Challengers and Visionaries quadrants.
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