It’s now standard operating procedure at virtually every conference I attend: the execs on stage are talking about a disrupted digital future and how they can enable it to an audience that’s pretty much focused on how their vendor can help them do a better job today: The future can wait.
Informatica’s InformaticaWorld 2016 had this problem in spades – over 90 percent of the attendees were practitioners who use Informatica’s vast middleware portfolio to wire up the data in the enterprise and otherwise enable developers and business analysts to build apps and analytics that span their companies’ vast, heterogeneous IT environments.
Nonetheless, Informatica used its annual user conference to flog its Intelligent Data Platform (IDP) as the foundation for an enterprise-wide effort to make available any and all data inside (and outside) an organization for use in a wide variety of applications (customer engagement, for example), business initiatives (IoT), data governance and security processes (regulatory compliance), and other worthy goals. IDP is nothing if not comprehensive – and represents one of the best platforms for these initiatives in the market today.
To be sure, this ability to connect data, information, and applications across heterogeneous environments and put it to use is a helluva market opportunity. But it’s also a single market opportunity with a single buying center in theory only: Informatica’s and its competitors’ use cases are largely local, departmental, and delivered as projects, not across the enterprise, and the buyers and influencers are equally scattered. Even though the problems Informatica addresses exist across the enterprise, and impact every nook and cranny of every company.
Therein lies a dilemma facing Informatica and many other leading technology vendors: how to get tomorrow’s message in front of an audience of decision-makers who don’t normally show up at vendor user conferences. Or, to be more succinct: how to move beyond pitching tomorrow’s message to yesterday’s audience.
This is made all the more complicated by an unfortunate confluence of loosely defined terminology – what the hell is a platform anyway? – and a poorly defined sales and buying process for this poorly defined market. Tomorrow’s message is about buying an enterprise-wide platform – which, unfortunately is a catchword used by applications vendors, middleware vendors, database vendors, and every form of cloud vendor. And to do so vendors must find the right buyer – and, almost without fail, that person either doesn’t exist or doesn’t tend to show up at user conferences.
While Informatica catered to its practitioner audience on day two with a lot of talk about new tools and technologies, and evoked the sacred enterprise mantra of cloud, mobile, big data, usability, and IoT as a justification, it’s clear that Informatica’s real imperative is to reach an almost mythical class of decision-makers who were largely absent from InformaticaWorld. Instead of practitioners who are trying to wire Workday data and processes to SAP or Salesforce.com data and processes – and are happy to learn about the new connectors coming down the road that make this possible – Informatica needs to engage a decision-maker who can look at the digital future of his or her company and make a big, comprehensive buying decision about Informatica’s enterprise Intelligent Data Platform. And do so with the active support of newly empowered line of business executives and their IT counterparts.
Getting to that audience is a challenge that Informatica and every other vendor needs to meet, and meet soon. The rapid shift in the enterprise market towards all things digital – whatever that actually means is uncertain – has put enterprise buyers in an uncomfortable position. Every major vendor in an individual company’s portfolio is pushing a platform strategy that postulates – sometimes well, sometimes maladroitly, and sometimes foolishly – that nothing but goodness can come from adopting Vendor X’s platform as the customer’s strategic enterprise platform. Emphasis on strategic and enterprise – which translates as “exclusive” in the eyes of every sales exec roaming the enterprise software market today.
Of course, it’s pretty clear that standardizing on a single platform on which to launch a company’s digital future is fraught with danger, particularly because that digital future is largely unknown. Many of the technologies and opportunities represented by the sacred enterprise mantra aren’t even signposts on the road to digital transformation, yet. They’re more like signs in front of a big hole in the ground that says “Future site of the world’s largest rollercoaster.”
It’s gonna be big, it’s going have thrills and chills, it might make you sick or make you beg for more. Regardless, it won’t be cheap, you’ll be waiting in line a long time for it, and, no, we won’t show you what it’s going to look like: we’re not sure ourselves.
But, to continue our imaginary platform sales pitch, don’t worry. Just pick our platform – brand new, still evolving, too much of which is kludged from the detritus of past acquisitions tied to a bunch of vaguely supported open source tools – and we’ll be there for you.
Many big apps vendors can sort of get away with this because they are deeply embedded in their customer’s back office, which means they are already on the platform short list. But even that incumbent position isn’t enough when most of the innovation is focused on the front office. IoT is a great case in point. Enterprise software vendors – the CIO-focused ones, including Informatica, SAP, Microsoft, Infor, Salesforce.com, and many others – are pushing hard to be leaders in IoT. But that’s really the CIO’s version of IoT, which is nascent, dominated by proofs of concept (POCs), under-funded, and guaranteed to require massive business process change to make it happen. Which turns out to mean that CIO-led IoT is destined to be a blip on the software vendors’ books for some time to come.
Meanwhile, IoT has been happening outside the purview of the CIO for decades – on the shop floor, in complex assets like jet engines and turbines, in large industrial power plants, refineries, and the like. That’s where innovation has to happen first – new types of sensors and controllers are needed, new, more security-conscious embedded operating systems need to be installed, new analytics and controls need to be envisioned, new data stores need to be built and maintained. And most of that still belongs to the operations side of the business – not the office of the CIO.
But no matter: enterprise software companies are using – or trying to use – their incumbency to flog a CIO-centric version of IoT to their favorite buying audience. That’s what deeply embedded means – so when you hear a vendor say “take my platform, please”, the amount of faith it will take to fully embrace any nascent enterprise software platform as a strategic enterprise platform in many cases outweighs the rational arguments put forth by the vendors. Not that that’s always a problem: If you’re a CIO and your CEO just said “let’s get some of that there IoT stuff,” you probably should go to your biggest incumbent vendor and do some IoT POCs with them. Sometimes insouciance can be bliss.
Back to Informatica and the platform wars. Platform pitches are the latest in a continuing battle for the hearts, minds and wallets of the enterprise, and by default they are being directed at the office of the CIO in a wishful attempt at getting CIOs to see the wisdom of implementing tomorrow’s message today. If you’re a CIO-centric vendor, this is your best shot at the future, because selling business gains to the lines of business is a little hard for your CIO-centric sales force. But, heck, you already knew that, right?
This is where Informatica has to go to win, and win big enough to mollify its new private equity owners: the offices of the CIO, CFO, CHRO, CMO, and so on. Ultimately, enterprise platforms can’t be sold piecemeal or separately to siloed lines of business. In order to realize their potential, they have to be sold, and purchased, as an enterprise-wide platform, or at least one that aspires to be.
But there are platforms and there are platforms, and then there’s Informatica’s platform. Many of the other platform vendors are for the most part optimized around a software product or suite that is either already in use at the customer or has a decent shot at being purchased. Their best shot is to take that incumbent position and use it as the jumping off point for as strategic a sale as the customer can stomach. If there is no incumbency, forget it. But even if there is, it’s rare that incumbency translates into ubiquity, and every company looking at upgrading a CRM, HRMS, ERP or other product and taking on its vendor’s platform is in for a fun time building consensus across the other lines of business that don’t use Vendor X’s products. Because Vendors Y and Z are knocking on those stakeholders’ doors, and are pushing their constituents and influencers to argue vociferously to standardize on their favorite platforms.
And there lies the unique Informatica opportunity. I can pretty much guarantee that most customers will resist the single apps vendor platform push as long as possible, if not forever. And even if they think one day they will have a single platform, many will want to hedge their choice of platform for as long as possible.
That’s where Informatica’s un-platform comes in.
Adopting Informatica’s platform is fundamentally a way to hedge on a decision about which of the other apps-based strategic enterprise platforms will need to implemented one day, if they’re not already in place in one form or another. It’s clear that customers will have to start making some bets on new platforms, while doing whatever they can to stave off the inevitable, wholesale reconfiguring of the IT landscape that standardizing on a single apps vendor’s platform will entail.
This means hedging – dipping a toe in new platforms and technologies while ensuring that legacy investments don’t disappear just because of their legacy status. And that’s where Informatica can have an important play in the platform wars. You want some HANA Cloud Platform or Force.com or Azure – go for it. IDP will take care of the plumbing for these and any subsequent platforms your company may want to adopt. Switzerland? Heck, this is more of a Lord of the Rings gambit – one ring to unite them all – than a classic neutrality as a virtue Switzerland gambit.
The problem about who the mythical buyer is doesn’t necessarily go away, though an un-platform sale looks to me like it’s going to end up in the CIO’s office eventually. If Informatica can harness its practitioners – the folks who showed up at their recent conference – as influencers and allies in this mission, these foot soldiers could definitely help underscore the enterprise-wide nature of the problem that IDP can solve. The company will need to refine this outreach process in order to do so, however: I’m not sure that mission was undertaken as well as it could have been at the conference
No worries, the problem, and the opportunity, will be around for a long time to come. The nice thing about being a private equity company is that the acceptable timeframe for getting this right is no longer a matter of a quarter or two, but a matter of when the investors start getting fidgety. Considering that one of the main reasons to go PE is to have the time to digest these tectonic shifts without getting slaughtered in the public markets, I think time for now is in Informatica’s favor.