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Data management market heats up

Thanks to compliance concerns, scattered data and integration difficulties, the market for master data management will exceed $10 billion, according to IDC.

Need evidence that master data management (MDM) is an initiative companies are seriously concerned about?

Look no further. A recent study from Framingham, Mass.-based research firm IDC predicts the market for MDM will reach $10.4 billion by 2009, a compound annual growth rate of 13.8%.

Compliance will drive much of this investment as organizations strive to create and maintain a single view of products, customers, accounts or locations, according to Henry Morris, group vice president and general manager for IDC's integration, development and application strategies research.

Regulations like Basel II and the Sarbanes-Oxley Act are forcing companies to rationalize their disparate data systems. Companies are also realizing that to get the full value out of their CRM and supply chain systems they need to bring all their siloed data together.

The MDM market is a mixture of older technologies -- such as product information management, customer data integration (CDI) and financial consolidation -- and the emergence of MDM infrastructure software, which is built to support any and all types of data. IBM's acquisition of DWL in August, was a sign of the way vendors are trying to bring together these disparate offerings, Morris said. Vendors like Kalido, Stratature Inc. and Hyperion Solutions Corp., which have products that cut across different areas of MDM, should benefit.

And while software is a major part of the growth, it is services that will drive the spending in coming years, Morris said.

"The big winners are in the services opportunity -- the Accentures, Deloitte, Knightsbridge in the CRM area," Morris said. "Accenture is a good example. They have an information management, BI [business intelligence], content management and information governance practice. Overall, there's a real understanding that data governance is a discipline that's important."

Large global companies are leading the charge, Morris said, forming MDM committees to determine responsibility over data as they consider introducing new products or processing information about customers. It's a task they have to undertake if they want any insight into their business. For example, a global firm like Unilever is acquiring companies all the time and must continually integrate new data systems.

"People used to think an ERP suite would solve the problem," Morris said. "Then they realized as they acquired other companies they had multiple suites, with different implementations in different divisions in different geographies. This whole area really is a greater realization about the need to develop an infrastructure, policies and procedures around data."

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