Tag Archives: cnbc ranking
Earlier this month, CNBC.com published its first ever R&D All-Stars: CNBC RQ 50, ranking the top 50 public companies by return on research and development investment. Coming in the top ten, and the first pure software play was Informatica, mentioned as first among great software companies like Google, Amazon, and Salesforce. CNBC.com is referencing a companion article by David Spiegel – Boring stocks that generate R&D heat-and profits. The article made an excellent point: When R&D productivity links R&D spending to corporate revenue growth and market value, it is a better gauge of the productivity of that spending.
Unlike other R&D lists or rankings, the RQ50 was less concerned with pure dollars than what the company actually did with it. The RQ50 measures increase in revenue as it relates to increase in R&D expenditures. Its methodology was provided by Professor Anne Marie Knott, of Washington University in St. Louis, who tracks and studies corporate R&D investment, and has found that the companies that regularly turn R&D into income typically place innovation at the forefront of the corporate mission and have a structure and culture that support it.
Informatica is on the list because its revenue gains between 2006 and 2013 correlate directly with its increased R&D investment over the same period. While the list specifically cites the 2013 figures, the result is due to a systematic and long-term strategic initiative to place innovation at the core of our business plan.
Informatica has innovated broadly across its product spectrum. I can personally speak to one area where it has invested smartly and made significant gains – Informatica Cloud. Informatica decided to make its initial investment in the cloud in 2006 and was early in the market with regards to cloud integration. In fact, back in 2006, very few of today’s well-known SaaS companies were even publicly traded. The most popular SaaS app today, Salesforce.com had revenues of just $309 million in FY2006 compared with over $4 billion in FY2014. Amazon EC2, one of the core services of Amazon Web Services (AWS) itself had only been announced in that year. Apart from EC2, Amazon only had six other services in 2006. In 2014, that number has ballooned to over 30.
In his article about the RQ50, Spiegel talks about how the companies on the list aren’t just listening to what customers want or need now. They’re also challenging themselves to come up with the things the market can use two or ten years into the future. In 2006, Informatica took the same approach with its initial investment in cloud integration.
For us, it started with an observation and then a commitment to the belief that we were at an inflection point with the cloud, and on the cusp of what was going to become a true megatrend that represented a huge opportunity for the integration industry. Informatica assembled a small, agile group made up of strong leaders with varying skills and experience pulled from different areas—sales, engineering, and product management — throughout the company. It also meant throwing away the traditional measures of success and identifying new and more appropriate metrics to benchmark our progress. And finally, it included partnering with like-minded companies like Salesforce and NetSuite initially, and later on with Amazon, and taking our core strength – on-premise data integration technology – and pivoting it into a new direction.
The result was the first iteration of the Informatica Cloud. It leveraged the fruit of our R&D investment – the Vibe Virtual Data Machine – to provide SaaS administrators and line of business IT with the ability to perform lightweight cloud integrations between their on-premise and cloud applications without the involvement of an integration developer. Subsequent work and innovation have continued along the same path, adding tools like drag-and-drop design interfaces and mapping wizards, with the end goal of giving line-of-business (LOB) IT, cloud application administrators and citizen integrators a single platform to perform all the integration patterns they require, on their timeline. Informatica Cloud has consistently delivered 2-3 releases every year, and is now already on Release 20. From originally starting out with Data Replication for Salesforce, the Cloud team added bigger and better functionality such as developing connectivity for over 100 applications and data protocols, opening up our integration services through REST APIs, going beyond integration by incorporating cloud master data management and cloud test data management capabilities, and most recently announcing optimized batch and real-time cloud integration under a single unified platform.
And it goes on to this day, with investments in new innovations and directions, like Informatica Project Springbok. With Project Springbok, we’re duplicating what we did with Informatica Cloud but this time for citizen integrators. We’re using our vast experiences working with customers and building cutting-edge technology IP over the last 20 years and enabling citizen integrators to harmonize data faster for better insights (and hopefully, less late nights writing spreadsheet formulas). What we do after Project Springbok is anyone’s guess, but wherever that is, it will be sure to put us on lists like the RQ 50 for some time to come.