Opinion

Three trends that will shape the master data management market

Master data management (MDM) has become a crucial discipline, with MDM solutions sitting at the centre of many organisations' IT architectures. Gartner forecasts that revenue from sales of MDM software will reach $1.9bn in 2012, a 21% increase from 2011. Three key trends will shape this market's growth and evolution, and each trend has its complexities.

Managing multiple MDM domains

The first trend is the increasing desire for software that meets the common need to manage multiple master data domains. However, when it comes to specifics, different industries have very different requirements, so the picture is complicated. We predict that, by 2014, two-thirds of Fortune 1000 organisations will have deployed two or more MDM solutions to support their enterprise MDM strategy. This will either be because they find that no single multidomain MDM product can meet all their needs, or because of historically entrenched disconnections between teams working on different data domains.

On the supply side a growing number of MDM software vendors advertise their products as supporting multidomain MDM. Although this may be true at some level of proven or theoretical capability, it does not necessarily mean that these vendors can meet an organisation's full multidomain needs with a single product. Some vendors only achieve breadth and depth of coverage through multiple MDM products, some or all of which they may have acquired from others. This can mean there are significant technological differences within a vendor's product range, that the customer has to implement multiple instances, and that there is no unified master data stewardship capability. Other vendors may have a single product, but significant gaps in the breadth and depth of their multidomain capabilities.

In short, while many vendors' multidomain MDM capabilities are steadily improving, the picture is complex and, depending on what is required, there is a strong possibility that customers could end up with either a single product that cannot meet all their requirements or multiple products that are poorly integrated. When evaluating MDM software to meet multidomain MDM needs, it is advisable to evaluate each relevant data domain and to demand proof that the vendor can fulfil both the breadth and depth of requirements.

MDM in the cloud

The second trend concerns the hot topic of cloud computing. Many organisations are tempted by the benefits of cloud computing - but the importance of master data, and the need to secure it and its integration and interaction with other systems, also makes many reluctant to place their enterprise master data in a public cloud. At the same time, however, on-premises MDM solutions are increasingly integrated with software-as-a-service applications, and we see MDM technology starting to be deployed in the cloud for line-of-business purposes and specific business initiatives.

So far, only a few small providers of MDM technology and services have developed specific products for the cloud. Some of the larger MDM technology vendors have products capable of cloud deployment, but for these they tend to work with service providers in closely defined scenarios. They are not ready to market cloud MDM solutions strongly, and they have concerns about how doing so would affect their perpetual licence business.

Gartner's advice to organisations is to consider using public cloud solutions to meet the individual MDM needs of specific business stakeholders. However, organisations implementing an enterprise-wide operational MDM capability that requires tight, real-time and potentially transactional integration with business applications, or complex workflow and application interaction patterns, should implement MDM solutions on their premises or in a private cloud behind a firewall.

MDM and big data

The third trend relates to the meeting of MDM and "big data." Big data comes in many forms: some is structured, some unstructured; some is generated internally, some externally. Gartner's view is that MDM and identity resolution technologies will be key to linking the new sources of external data with enterprises' existing data sources, but that organisations will be unable to "govern" the new external data sources.

The need to link existing customer master data with social networks raises new challenges that require new approaches. An ability to act on the sentiments of people active on social networks is increasingly important for organisations, but acquiring it presents challenges. One is how to deal with the sheer volume and complexity of the data. It is necessary to create structure out of unstructured data, and to tag comments and associate them with similar sentiments in order to gauge aggregate trends. Another is how to use identity resolution tools to identify key social networkers and then link their identities and social networking behaviour back to the enterprise's systems. The MDM system maintaining the master customer profile data then becomes a key integration point. In future, therefore, MDM systems for customer data will have to be "social networking aware."

These trends will have a significant impact on the MDM market during the next few years. They also show how information management, and particularly MDM, is a key enabler of trends such as social networking, mobile communications and cloud computing. IT and business leaders involved in MDM programmes need to keep up to date with the convergence of these trends, so that they can overcome the challenges — and seize the opportunities — that await them.

John Radcliffe is research vice president at Gartner. He recently spoke at the Gartner Master Data Management Summit – click here for more details.

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This was first published in February 2012

 

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