Cloud, whether public or private or SaaS or PaaS, and big data, both point to more robust integration demand, from both IT and line of business. Informatica clearly grasps that market vision, and so given effective execution, there is no vendor better positioned to take advantage of such demand. In part responding to that demand, Informatica’s Q4 results suggest that they have emerged from an execution cold snap experienced during mid-2012. Q4 revenues and profits both nicely beat street estimates and INFA share prices jumped, reflecting rediscovered confidence.
What really caught ESG’s eye, however, can be found in the supplemental metrics, including (1) the pick-up in international deals and a (2) shift to more direct deals; whatever Informatica CEO Sohaib Abbasi did to remedy the weak European and sales execution issues of 2012, including bringing in John McGee as EVP of Worldwide Field Operations, seems to have worked. However, a more finely honed sales force is only as good as Informatica’s offerings, and while ESG appreciates how big data drives integration interest, cloud accounts for even more short and long-term integration demand.
Therefore, among Informatica’s recent product rollouts, ESG is particularly impressed by Informatica Cloud Winter 2013 release (“Cloud Winter”), made available in November 2012 in the midst of Informatica’s comeback quarter. The Cloud Winter release represents another in a long sequence of cloud-related integration releases spanning over 5 years. What made the Cloud Winter release unique, however, is that it seems to have reached the tipping point of functionality, matching the tipping point of cloud adoption by larger organizations. Consider the following highlights:
Volume: Informatica Cloud currently integrates in the vicinity of 1.5 billion transactions per day, more than a 10x increase over 3 years ago – this reflects not only a huge jump in demand for cloud integration, but also the fact that Informatica has kept pace with rapidly ramping demand. You can track Informatica’s latest cloud integration volume on its Cloud Trust web page.
Connectors and Templates: Cloud Winter did not merely increase the number of SaaS apps Informatica Cloud connects with (adding, for example, Workday, Marketo, and Concur), but as important has increased the various types of connectors available for many SaaS apps. In the Informatica Cloud Winter 2013 release, for example, it added a bulk loader and support for large attachments for Salesforce.com, SAP native BAPI support, and Netsuite general ledger integration. Informatica's universe of cloud connectors now covers over 50 SaaS apps, some developed by Infomatica but some built by its cloud community. The connectors and a long list of integration templates are made available on the Informatica Marketplace. 3rd party participation in connector and template development is critical as PaaS increases its foothold for custom apps.
Ease-of-use: Customers often state that if there is one improvement they would appreciate from Informatica it would be less technically complex products. For example, customers would prefer to use data analyst resources for addressing integration versus software development resources, reducing costs and increasing speed. Informatica has heard customers clearly, judging by the Informatica Cloud Winter 2013 release, which includes revamped user interfaces for administrative and integration development purposes. It also includes a community-driven set of updates for Cloud integration that reduces the number of integration steps, and adds the ability to define custom parameters.
Data Governance/MDM: With a particular focus on Salesforce.com, through incorporation of the acquired Data Scout technology, Informatica has met refreshed interest in data governance, quality, and master data management – interest spawned by both cloud apps and big data. The theme of a more simplified UI applies here as well, as Infomatica has added a setup wizard, and integration with their Multi-Domain MDM capability which will prove useful for those well-heeled enterprises that want to extend their data self-discipline to Salesforce.com.
The Bigger Truth
ESG’s recent 2013 spending intentions research survey (due for publication soon) illustrates that 50% of organizations are using SaaS, with 19% more planning to add SaaS going forward, and those already using SaaS planning to add more apps. While only 15% of organizations are using PaaS, 23% plan to add PaaS. Those numbers underscore not only how far cloud apps have come, but how much further cloud apps have yet to go. While security remains the most oft-stated hurdle for cloud adoption, once customers cross into SaaS and/or PaaS they discover that integration becomes the gating factor for cloud apps to participate in cross-silo business processes, complex transaction processing, and big data. ESG is not suggesting that Informatica Cloud Winter 2013 release should receive the credit for Informatica’s Q4 comeback. ESG is suggesting is that now and going forward Informatica’s cloud integration solutions are firmly in position to actively contribute to Informatica continuing its momentum.