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Extract Transform and Load Competitors Regroup, Plan Offensives

ETL competitors view IBM’s acquisition of Ascential as a game-changing opportunity

• By Stephen Swoyer
• March 23, 2005

The ongoing ETL tools consolidation was in the spotlight last week by IBM's acquisition of Ascential Software Corp. Ascential is one of the largest purveyors of ETL tools. In fact, the market-changing activities of the early 2000s made Ascential, Ab Initio, and a handful of other vendors the only pure-play ETL vendors in the business. (ETL competitor Informatica Corp. has since tried to distance itself from its non-data-integration product offerings in an effort to shore up its own credentials as a data-integration pure play.)

So even if IBM continues to enhance and resell the Ascential technologies as standalone products—as Big Blue has said it will do—the acquisition is a game-changing opportunity for many in the ETL market. Even if IBM makes no changes to Ascential’s product and technology stack, there’s a sense among ETL competitors that the Ascential customer base will still be up for grabs.

Consider SAS Institute Inc., which—very quietly—has developed into an ETL provider of some renown.

“Personally, I was surprised it wasn’t Informatica” that was purchased by IBM, says Bill Prentice, a technology strategist with SAS. Prentice—like a number of other industry watchers—suggests that Informatica has been at pains to cozy up to IBM for several months now. But is he concerned that the combination of Ascential’s ETL, data quality, data profiling, metadata management, and real-time capabilities with IBM’s EII, EAI, and application server expertise will result in a data integration powerhouse without peer?

Not at all, Prentice protests. “We really are not concerned about this. If anything, we’re excited. This is a huge disruption in the market, and as you know, any time there’s a disruption, there’s going to be an opportunity there,” he asserts. “[We believe] that some [Ascential customers] are going to have some concerns about the direction [IBM is] going to take” with Ascential’s assets.

And what of Informatica? Last week, several industry watchers predicted that the ETL market leader would respond to IBM’s move by unleashing an offensive of sorts. “From Informatica's perspective, they can create [fear, uncertainty, and doubt] about the Ascential product line being optimized for IBM products while they remain neutral to all,” notes Mike Schiff, a senior analyst with consultancy Current Analysis Inc.

To some extent, that’s just what Informatica representatives did—very carefully, of course, given the company’s cozy relationship with Big Blue.

For starters, says Karen Steele, VP of corporate marketing with Informatica, IBM’s move—while admittedly disruptive—wasn’t exactly a surprise. “For historical reasons, this was not a big surprise. We heard some rumors early last week, [and] if you look at the relationship between IBM and Ascential, a lot of people predicted this was going to happen.” But did IBM also approach Informatica about a possible acquisition? No, Steele says: “I’m not suggesting that they won’t consider us, but we weren’t in conversations about that topic.”

Is Informatica concerned about competing against the combined IBM/Ascential? Not at all, declares Steele, who suggests that the post-acquisition Ascential product stack will be tightly coupled with IBM “middleware” technologies such as DB2 and WebSphere.

“If you look at what IBM’s competitors have done [with ETL], in the case of Microsoft with DTS, that’s great for SQL Server. The same thing goes for Oracle’s Warehouse Builder, which is limited to Oracle databases. Those vendors have optimized for their own databases,” she argues. “We believe that there is a huge importance for pure play. We’ve been in this market longer than anyone else.”

Almost to a vendor, Ascential’s ETL competitors stress they see the upside of the acquisition, which they say underscores the emerging centrality of data-integration technology.

“It validates it, I think. It shines a light dead-on what has pigeonholed ETL for a long time. The market is starting to realize that, as we have been evangelizing for a long time, that data integration is a huge problem,” Steele says.

Darren Cunningham, product marketing manager for Business Objects SA’s Data Integrator ETL tool, echoes this perspective. Like many of his peers, Cunningham also wants to downplay talk that IBM’s move more or less completes the commoditization of ETL by the major RDBMS vendors.

As far as the non-RDBMS ETL community is concerned, the market for stand-alone, toolset-centric, or value-added ETL is far from dead. If anything, some vendors say, customers will use different ETL tools for different applications. A shop with both SQL Server 2000 and Oracle 10g will probably opt to use Microsoft’s Data Transformation Services (DTS) and Oracle’s Warehouse Builder, respectively, to retrieve data from either system.

Similarly, Cunningham argues, customers that tap Business Objects for either operational reporting (via Crystal) or business analytics are increasingly opting to use Business Objects’ own ETL tool, “What’s happening is there is this large trend in business intelligence—it’s a realization of the importance of trusted information, of the ability to ensure your numbers are correct, and that allows us to tie this [data integration] technology to the overall use of our business intelligence [tools],” he argues. “I’ve never heard so much discussion around data quality among our business intelligence-focused customers. That’s why we see so much opportunity in our install base.”

It's also possible that existing Ascential customers might view that company’s acquisition with something less than anticipation. When Oracle targeted PeopleSoft in a hostile takeover attempt, for example, many PeopleSoft users expressed fear that the database giant would mandate the use of its own data store—and attendant database-centric technologies—as a result. Of course, Oracle’s bid was as hostile as they come, and (on top of that) Oracle executives had publicly floated the idea of killing PeopleSoft’s products.

IBM has done no such thing. In fact, Big Blue assured Ascential customers it will continue to develop and market a standalone version of Ascential’s data integration technologies. What’s more, says Jeff Jones, director of strategy for IBM’s data management portfolio, it’s in Big Blue’s best interests to do so, given the prominence of its IBM Global Services unit, which often sells non-IBM hardware and software into customer accounts.

Do Business Objects, Informatica, SAS, and others plan to ramp up their marketing to reach out to customers who have qualms about IBM’s move? Cunningham, for his part, says his company has been more aggressively marketing its Data Integrator. “The timing of this news really does give us an opportunity to be able to go and do that now,” he says.

Reached last week, SAS’ Prentice said his company didn’t have anything in the works specifically to target Ascential customers. At the same time, he acknowledged, SAS has started to more aggressively market its Enterprise ETL tool, so the timing of IBM’s announcement—which comes a few weeks after SAS announced a revamped version of Enterprise ETL—is fortuitous.

SAS apparently had a change of heart over the weekend. On Monday, the company announced a new ETL benchmark result that—it claims—demonstrates the superior performance of its Enterprise ETL offering. In its pitch to IT journalists, the company said the new benchmark proves that Enterprise ETL is “more than competitive” with other offerings, and stressed that—“in light of recent acquisition announcements”—SAS is well positioned to “offer its customers a level of corporate and product stability that seems to be lacking in the industry.”

Informatica’s Steele, for her part, thinks a lot of customers could be in play. “For some customers in this market, it definitely creates some uncertainty,” she concludes. “In general, for us, we think this is actually pretty positive news. It’s exciting because it validates the importance of data integration and also shines a light on a pure play system like ours.”