Informatica Perspectives

Nicholas Carr infamously penned “Why IT Doesn’t Matter” back in 2003, and many in the IT world howled their indignity at the idea. Many proved over and over that IT did matter in many businesses. IT did provide competitive advantage.

But part of what he stated does resonate now. Business applications used to be the epitome of how IT helped differentiate an enterprise. American Airlines invented the yield management system for allocating and pricing airline seats, revolutionizing the industry and generating an estimated $1.4 billion in additional revenues over three years. MCI won five points of market share from AT&T in the 1990s with its Friends and Family plan, enabled by its uniquely flexible billing application. Bank of America cemented customer relationships and leapfrogged competitors by providing state-of-the-art electronic bill pay capabilities.

But more and more, the custom or customized application is dying. Of course, there will always be custom applications, and some companies and industries such as Wall Street will remain highly dependent on them. But for many enterprises, the cost of maintenance and the inflexibility caused by decades of either building custom applications, or highly customizing packaged applications from vendors, has simply become too high to bear. Many organizations have laid down a new law: applications are to be purchased, and they are to be implemented vanilla— no customization. Several CIOs at a CIO conference I recently attended stated this as their go-forward strategy. If the applications are vanilla, they can no longer be the source of competitive differentiation.

So what in IT is now the source of competitive advantage? The data. The data transcends the application. The data outlives the applications. Data is more important than the applications. After all, the applications are the means to capture the data, but the data captures what is actually going on in the business.

IT organizations need to shift their priorities to recognize this reality and to focus on their data infrastructures. We’re already seeing signs that this is happening. Historically, the applications folks tended to be at the top of the totem pole in the IT organization. But more and more IT executives are putting their key managers on data integration and data management. Some are even anointing data czars or chief data officers. In fact, at the conference, the CIO of an insurance company asked me for leads in recruiting a data czar, a position he was about to create. (If anyone wants the job of data czar in the Philadelphia area, let me know.) The CIO needed someone to think about data and information strategically across the entire enterprise, while his existing IT leadership kept the shop running smoothly.

Applications are still a core foundation to any business. But like email and networking, they are becoming commoditized. The key to competitive differentiation is in your data and how you integrate and manage it.

Next posting: Why you should throw out your ROI analyses.

Over the past few weeks we’ve been talking to Informatica customers about cloud integration at the Informatica 9 World Tour events. In most of the cities, we’re hosting a Cloud Breakfast to dive in to what Gartner has listed as one of the top 10 strategic technologies for 2010. Not surprisingly, interest has been widespread. Attendees include people in IT and line of business (LOB) roles; people with PowerCenter skills and long-time Informatica Cloud customers; CRM administrators and IT architects; sales and marketing operations; ISVs and quite a few consultants.

One thing that they all have in common is that they’re thinking about the opportunities and challenges that the shift to cloud computing represents. As one attendee put it, “we can either get on the train or get run over by it!”

[Read more]

The main goals of any Application ILM project are to reduce cost, improve application performance while maintaining compliance.  To meet these goals, data has to be moved from a production database to either an online, accessible archive or purged completely from the system.  In either case, data is deleted from production.  Deleting data can have a significant impact on the production system’s performance if not executed carefully.  However, once the data is gone – the benefits have a ripple effect.  Production tables are smaller and more manageable.  Recovery times and maintenance windows can be reduced.  The cost of managing a smaller production database is reduced proportionally with the amount of data removed. 

[Read more]

The cover story on the March 8th issue of Computerworld is “Swinging Toward Centralization”. It talks about the pendulum moving toward IT consolidation as organizations strive to save money and improve controls. This article is not alone. A growing number of analysts are talking about consolidation, Lean IT practices, and taking “a production line approach to integration”.  When you combine all this rhetoric with the industry fundamentals, the stage is set for 2010 to The Year of the ICC. [Read more]

Good architecture is the foundation required for agile systems that are responsive to business needs. We see that with SOA, which has been missing a vital piece of its architectural approach – from the data. Since it came about in its current form in the early-to-mid 2000s, service-orientation (mainly focused on applications) has existed in a separate world from data management.

Problem is, an SOA-enabled infrastructure with bad data flowing through it can be useless and even dangerous. One commentator even compared SOA to a mosquito that can deliver payloads of bad data (”viral data”) at lightning speed all across the enterprise — pandemic style — before it can be stopped. [Read more]

Loraine Lawson did a great job covering the topic of the integration challenges around the cloud and virtualization. She reports that “…a recent Internet Evolution column [by David Vellante] looks more broadly at the cloud integration question and concludes that insufficient integration is holding up both cloud computing and virtualization.”

In fact, what currently limits the number of cloud deployments is the lack of a clear understanding of data integration in the context of cloud computing. This is a rather easy problem to solve, but it’s often an afterthought.

The core issue is that cloud computing providers, other than Salesforce.com, don’t consider integration. Perhaps they are thinking, “If you use our cloud, then there is no reason to sync your data back to your enterprise. After all, we’re the final destination for your enterprise data, right?” Wrong. [Read more]

While the market is showing signs of recovery from the "Great Recession" most state budgets have been feeling the squeeze from the lag in recovery. In a recent article titled The Sorry State of Finances, Liam Denning explained that, "55% of state revenue, before federal transfers, comes from personal and corporate income tax." Denning also stated that, "the first three quarters of 2009 were the worst for state tax since at least 1963."

There is an apparent lag between recovery in the private sector and a state receiving tax revenue. So what can states do about this problem while they suffer in the red? Mr. Denning said, "Since states can't run general funding deficits, closing gaps mean raising taxes, cutting services and resorting to one-time measures." Mr. Denning's list of solutions is certainly accurate, but does it include all options that states have? What about employing new technology to discover fraud or recover uncollected revenue? [Read more]

This week, I attended a CIO conference in Philadelphia, for the first time in a couple of years. It was really good to hear them talk about their experiences, goals and issues, and to talk with some of them one on one. It spurred a bunch of new thoughts, which I’ll be writing about in a series of upcoming blogs. This first posting is on CIOs playing offense.

In my last posting, I talked about the Dr. Jekyll/Mr. Hyde nature of data—data being both an asset and a liability. The CIOs talked about playing offense vs. defense. They really wanted to be engaged with business transformation and growth initiatives. But many were saddled with cumbersome, expensive IT environments that sucked up 90% of their IT spend and resources just to “keep the lights on”. In other words, they were spending almost all their time and energy playing defense. [Read more]

Over the last few blogs, we have stepped through a project to implement Information Lifecycle Management (ILM) on corporate databases.  First, we evaluated the target databases, then we determined the Business Objects and assigned retention periods to the data – including both Legal and Operational requirements.  Now that we are ready to start applying the retention policies and deleting data, it is a good idea to set up an archive database as an intermediate repository for business objects classified as legal records.
[Read more]

I am very fortunate to have a CIO role that extends beyond the traditional responsibilities of IT. Part of my role includes the strategy and implementation of the recently launched Informatica Marketplace.

The Informatica Marketplace has generated a lot of buzz with our customers and partners. Last week while I was presenting at the Pacific Crest Annual Cloud Computing Conference I heard the excitement about our new offering from many of the attendees. Mostly, people appreciated our continued thought leadership and commitment to providing an open platform to host solutions for data integration, data quality and data management. And yes, it is an open platform to host solutions that not only support Informatica, but other vendors too - even competitors. Our fundamental belief is that the hand of free enterprise will ultimately win, so we are willing to provide an open platform to do so.

Here are a few questions I've heard and answered over the last few weeks: [Read more]