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Data quality market evolves as interest ramps up

The data quality market has seen some consolidation in recent years and, as bad data continues to haunt the enterprise, that should continue.

Without the right data, CRM is just a bunch of acronyms and business jargon. And the data quality market, roughly the same age as the CRM market, is starting to capture some of the attention that CRM claimed for itself five or six years ago, said Robert Lerner, senior analyst with Sterling, Va.-based Current Analysis.

"[Data quality software] has been around for a while, but the problem is it has taken a lot of education to put it on the map," Lerner said. "There's nothing intrinsically sexy about data quality, but you can't have CRM without it."

However, people are now concerned enough about data quality that mergers and acquisitions are heating up. Pitney Bowes Inc., a postage meter vendor in Stamford, Conn., purchased Group 1 Software Inc. of Lanham, Md., in April. The entry of Pitney Bowes should have little effect on the market in the short term, but the possibility that it will make Group 1 a strong competitor needs to be addressed by other vendors, Lerner said.

Ascential Software Corp., in Westborough, Mass.; Firstlogic Inc., in La Crosse, Wis.; Innovative Systems Inc., in Pittsburgh; Trillium Corp., a division of San Antonio-based Harte-Hanks Inc.; and DataFlux Corp., a division of Cary, N.C.-based SAS Institute, are the other major vendors in the market, Lerner said.

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With the acquisitions by Pitney Bowes, SAS and Harte-Hanks, technology purchasers need to be wary of making investments in some of the smaller companies, Lerner said, noting that he still sees room for further consolidation. There have been three other minor mergers and acquisitions in the data quality market this year.

Additionally, Group 1 should be free to partner with other technology vendors as it sees fit because Pitney Bowes is primarily in the hardware business, Lerner said. DataFlux and Trillium have parent organizations with competitive pressures.

Vendors are focusing development efforts on support for Web services and making data profiling -- the characterization of data -- a major part of their product set, Lerner said. The rash of acquisitions has brought an end to the standalone market for data profiling.

Additionally, internationalization remains a major focus. Global companies need to be able to keep data consistent across countries. Most of them are working to support unicode to sell into Asia-Pacific region, Lerner said.

But for the most part, the data quality market serves companies seeking to clean their database of names and addresses. Interest in the technology has increased but there are still many organizations that don't understand its importance, Lerner said.

"If a company is interested [in data quality], they have to realize it's not a departmental need, it affects everything across the entire organization," Lerner said. "Wherever you have data, you have to have accurate data."

Technology buyers should look at ease-of-use features and data profiling capabilities.

"You need to take a mindset that you can clean up your data and make it accurate, but the second you do it, it falls apart," Lerner said. "It's a continual process. Things change."

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