Blog: David Loshin

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Data Quality Tools Consolidation Continues

I just read a press release that said that Pitney Bowes "has signed a definitive agreement to acquire all of the remaining
outstanding shares of Firstlogic for approximately $50.3 million." Firstlogic, one of the few remaining independent data quality tools vendors, will now become a wholly-owned subsidiary of Pitney Bowes, which acquired data quality tools vendor Group 1 a year ago April. It will interesting to see how, if at all, the two tool suites will be combined. Note that prior to Group 1's acquisition, Group 1 itself had acquired ETL vendor Sagent. Is Pitney Bowes looking to get into the ring with IBM on the ETL/Data Quality Front?

What does this bode for the DQ Tools industry?

Trillium, which is owned by information provider Harte-Hanks, recently purchased data profiling tool vendor Avellino. Ascential, full on a dinner of Metagenix, Vality, and Torrent, found itself on IBM's dinner plate. Evoke, which had sold its remaining assets to COnversion Services about a year ago, just was passed along to European Data Quality company Similarity Systems. SAS bought DataFlux a few years back.

One might consider this evidence of one of two things. The first thing is that data quality technology has matured to the point where it is deemed critical to the information movement process. IBM's acquisition of Ascential and DWL provides end-to-end coverage of the information chain all the way to the end-user, while Pitney Bowes may be repositioning itself to break into that market as well. There is little information on upstart ETL vendor Ab Initio, but one might surmise they have some tricks up their sleeves in the data cleansing arena, between development and partnerships.

The second thing might suggest that data quality tools vendors are not able to establish a healthy market standing on their own two feet, or else there might not be such a preponderance of acquisitions.

Most likely, a combination of a desire on behalf of larger information vendors (e.g., IBM or Harte-Hanks) to incorporate data quality into their bags of tools indicates the clarity of the importance of data quality, and a need to keep the good DQ tools vendors healthy is what is driving this continued consolidation. And this echoes a lot of the sentiments I have been saying in a number of my columns, articles, and appearances over the past 4 years.

Where else might it go? Here are some things that I see in my crystal ball for the next few years:

- Continued acquisitions in the Data Quality Space

- Look to see the big guys gobbling up more innovative tools vendors on the periphery, such as Metadata management, Semantics and Taxonomy management, and Customer Data Integration.

- Larger vendors (e.g., Oracle, SAP, etc.) may be developing their own suites of data quality tools, or look for ways to divorce themselves from recently acquired partners

- Look for more innovative ("second generation") data quality management tool vendor start-ups that will look more and more attractive to large conglomerates like IBM, Oracle, Informatica, Business Objects, etc.

Oh, and on that last note: anyone have any seed capital? I've got some great ideas a-brewin' ;-)

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