Talend enters a new market and everything changes - literally.  Last week, we introduced the first open source MDM solution and one week later the market landscape has undergone substantial consolidation with the two leading pure play MDM vendors being bought by larger companies.

Last spring as we were considering an extension to our product line, we carefully considered the MDM market because it is a natural extension of our historical core competencies of data integration and data quality.  We also evaluated the market conditions to see if it was ready for an open source solution.  What we found was a quickly maturing market that was gaining significant momentum.  These three factors lend well to the introduction of an open source alternative.

Our goal with Talend MDM is to democratize this space, just as we have done with data integration and thus far the reception has been amazing.  We have introduced an affordable, open source alternative at a fraction of the cost of cost-prohibitive and disjointed proprietary technologies.  In just over a week and a half we have had over 1500 downloads of the Talend MDM Community Edition.  The press and analysts and more importantly, our current customers have accepted our message and the blogosphere, twittosphere and other o-spheres are abuzz with open source MDM stories.

Then, everything changed.

Last week, Informatica bought Siperian and this week, IBM acquired Initiate Systems.  The two largest pure play vendors were consumed by bigger fish.  This changes the landscape and shrinks the battlefield.  This is business as usual in the proprietary software market; consolidation of closed, black-box technology in the hands of megavendors who control the entire data management stack chain and can dictate their terms to customers. All the while, we are immediately considered a leading pure play and are one of only a few independent MDM vendors.

This consolidation validates both the MDM market and our approach.  The two large acquisitions denote the mark in time that a baseline monetary value was placed on this growth market.  MDM is no longer a nascent market, it grew up and is here to stay.

The consolidation also validates our product strategy.  We have introduced a unique MDM solution.  It is driven by an Active Data Model and packages data integration, data quality, master data management, workflow and stewardship into a single platform.  This past week’s acquisitions represent a strategy to cobble these features together to meet the market demand.  We haven’t cobbled features together; we have united them on a single platform.

I am confident that we offer a compelling MDM technology and the initial interest has confirmed this.  Talend presents a flexible solution for the vast array of domains that need mastering and we will financially, strategically and technically help simplify the MDM business case process. Talend MDM decreases the time to value for MDM implementations and provides an ecosystem and community for sharing MDM discipline, governance, process, and organization…  it democratizes the market.

The problems that MDM addresses have been around forever and they will continue.  In fact, this MDM earthquake we are experiencing represents market maturity.  In this fundamental shift, we feel the time is right for open source MDM.

Bertrand

In a smart IT world, clients would cheer when a price drop was announced. But in our glass-half-empty world, customers only show joy when they hear that a price increase has been postponed!

This is the sad reality of the proprietary IT universe. “SAP Announces Delay in Maintenance Fee Increase” and (particularly DSAG and USF) express their delight.

As mentioned in a previous post:

“The price of maintenance is thus set at 22% of the software license price, compared to the 17% it was previously. However, this increase will not take full effect before 2015 for current customers - the cost of support will go up 3.1% annually, rather than an immediate 8%. New clients will be charged 22% as soon as they sign the contract.

In exchange, SAP agreed to jointly develop KPI benchmarking in order to measure the value of Enterprise Support (business continuity, business process improvement, protection of investment and total cost of operations) and to delay future increases until these targets are met.”

Eweek commented that on December 1 SAP announced “it will delay a decision on increasing customers’ maintenance fees until the beginning of 2010, in recognition of “ongoing pressures” on IT budgets in the aftermath of a global recession.” So, changing a maintenance fee from 18.36% to 18.9% is delayed; and that’s the good news!

In the aftermath of a global recession, we would be more inclined to suggest that they switch to open source. And it does seem that they’ve noted the trend. As Eweek reported: “SAP saw its revenues fall by 9% during the most recent quarter, due to an ecosystem-wide decrease in spending on business software.”

In response to the SAP decision, two of the user group members leading the project resigned, but “the Enterprise Support program is still on track.” So, besides the ongoing recession, what can SAP users expect? Nothing. As shown by Oracle’s decision earlier this year, the maintenance fee is set to rise to 22%. This is business-as-usual in the proprietary software world.

As I said in my earlier post: “Maintenance fees for open source solutions aren’t calculated the same way and, with no license fee, the open source alternative is far less expensive than a proprietary solution. And, finally, with free access to the source code, users can easily personalize their systems and at much less expense than contracting with SAP’s expert consultants.”

In fact, user reaction might be straightforward. They know that open source alternatives can help them cut expenses, while keeping the same level of service. And this is strengthened by Talend’s recent inclusion in the Gartner Data Integration Magic Quadrant. Open source is here to stay!

Bertrand