Q&A: Informatica CEO Abbasi Sees Big Opportunities In Big Data

Informatica was perhaps the original big data company, developing advanced data management and integration software long before the term "big data" was even coined.

The past year was a busy one for Redwood City, Calif.-based Informatica. The company closed in on the $1 billion annual-sales mark in 2013 and launched several groundbreaking products such as PowerCenter Express for entry-level data integration and the Vibe embeddable virtual data machine.

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CRN spoke with CEO Sohaib Abbasi recently to catch up on what is happening with Informatica, in the data management market, and with the company's channel plans. Here is an edited transcript from the interview.

Can you give us your assessment of what's going on in the data integration space right now? There's been an explosion of data sources like cloud-based systems, Hadoop, next-generation databases, and so on. I would think that would make data integration more complex, but also present opportunities for vendors like Informatica.

We [recently] reported our Q3 results and we had a record quarter. And that's a reflection that the demand for data integration technology is stronger than ever.

Let me talk about three trends. The first, obviously, is cloud, where cloud, in our view, represents the next wave of data fragmentation. Any customer that relies on a cloud service provider like Salesforce.com or Workday, relies on them to manage the data for sales or for HR. And that creates the new complexity with data from the cloud combined with on-premise data. Informatica was one of the early pioneers. We announced our cloud data integration service six years ago, and subscriptions represent about 10 percent of our overall software revenue.

The second trend is big data. Big data represents a major opportunity for Informatica. At last count, there were six distinctly different ways of doing analytics. There is the traditional data warehousing like Teradata, there are databases like EMC Pivotal and Greenplum, there are in-memory databases like SAP HANA, there are agile BI vendors such as Tableau and QlikTech, there are cloud analytic services like Amazon Red Shift and Google Analytics, and finally there is Hadoop. And Informatica, with our track record of neutrality, supports it all. In fact, we've launched the industry's first virtual data machine, called Vibe, that makes it possible for customers to map data once and then use any variety of analytics. That represents a long-term opportunity with the growing interest in analytics.

The third thing that is going on is the Internet of Things and [the] industrial Internet where now you have machine data. The volumes, velocity, variety are unlike any that we've seen and once again positions us at the forefront. You've probably heard our announcement earlier of the Informatica Vibe Data Stream for Machine Data.

So if you consider the megatrends of cloud data, the next wave of data fragmentation, big data with a variety of analytics, and the emerging opportunity with machine data and the Internet of things, Informatica is very-well positioned for long-term growth.

Talk about the competitive landscape. Who else do you see out there in the big data space? How about IBM with their Cast Iron and Dell with its Boomi?

Remarkably, the majority of [our] deals are not contested by a commercial competitor. For the most part we're convincing customers about the value of buy-versus-build. Of the competitors that you mentioned, we come across IBM most frequently, in less than 20 percent of our deals, and we win the vast majority of them. And there's no other competitor we encounter more than 5 percent [of the time].

One of the reasons we win like that is our track record of neutrality. We're viewed as the Switzerland of data integration. We don't have a hidden agenda to promote one database over another, or one BI stack over another, or one business application over another. And that neutrality also allows us to partner very, very closely with a variety of partners. In fact, partners influence the majority of our deals.

NEXT: What's The Split Of Your Customer Base Between Bigger Companies and SMBs?

Informatica's sales were traditionally to larger companies. What's the split today in your customer base between bigger companies and smaller or mid-size companies?

Being the early pioneer in cloud integration, it's no surprise that among the 1,000 or more customers using cloud data integration, we have companies of all sizes. That service, Informatica Cloud, is as simple to use as Amazon.com. You can go and enroll in a matter of minutes and start using it. That has allowed us to [sell] beyond the traditional IT department and beyond large organizations.

In addition to our cloud integration products, we announced PowerCenter Express, which is aimed at departmental jobs. There we're working very, very closely with channel partners in some geographies. In China, for example, we have a very aggressive channel program around PowerCenter Express and PowerCenter Express Personal Edition. So we have products that are channel-ready.

Our channel revenue is growing at about 50 percent or more faster than overall company revenue. And our company grew by about 24 percent [in the third quarter ended Sept. 30]. That is very healthy growth. The channel contributes about a quarter of our revenue, and in addition to that influences another quarter or a little bit more. Altogether about 50 percent of our deals are touched by partners and a quarter of them are done entirely through our channel.

Some of our channel [partners] in North America include SSG, Amberleaf, Intricity [and] Knowledgent Group. And we will continue to expand our channel program using both our cloud offerings [and] our on-premise offerings, and provide very attractive reseller-influencer benefits to our partners.

So Informatica Cloud and PowerCenter Express, are those the key products for the channel?

Those products are certainly for [solution providers] that don't have a lot of value-add services. Some organizations, including the global [systems integrators], have built assets leveraging a variety of our technologies. So, for example, many of our global systems integrator partners have built assets around our MDM [master data management] offering. Systems integrators offer an MDM application for the oil and gas industry to monitor the profitability of oil wells. Systems integrators have similarly developed dozens of assets that are suitable for a broad range of verticals. They have developed content, software and assets around our technology.

Our partner strategy involves going into a variety of different verticals. Often the partners add value with their deep knowledge of the key verticals for Informatica. Our top verticals obviously include financial services, public sector; retail is becoming a very big part of our business; high tech, manufacturing, [and] healthcare [are] also a very big part of it. If you look at each of those verticals, our partners typically would have a lot of vertical domain knowledge. And in many cases they have built assets leveraging and embedding Informatica technology.

NEXT: What's The Major Focus At Informatica Right Now?

What's the major focus at Informatica right now and what do you see as the key challenges for the companies for the next couple of years?

You should expect [more] announcements around our Vibe Virtual Data Machine. That is a very novel concept. Java transformed application infrastructure with the value proposition of write-once, deploy everywhere. We believe data infrastructure requires dramatic simplification. It has gotten very complicated with [data] sources on mainframes, on client/server systems, on massively parallel systems for e-commerce transactions, cloud services, social data [and] machine data. So the variety and the complexity of data infrastructure need simplification. The Virtual Data Machine is our offering that simplifies that complexity with map once, deploy everywhere.

We will [work] with our industry partners to come up with new standards, just as SQL was the standard 30 years ago. And we will continue to focus on the "Internet of Things," and make sure that we can provide the infrastructure to harness the value of Internet of Things.

In addition to that, we are focused on providing the most comprehensive platform for customers to gain more business value out of their data. When I have conversations with business executives, the imperatives they talk about [are] intelligence, which is where the interest in analytics comes from, [and] agility, where we have a lot of products that allow data to be served up as quickly as possible.

The third [issue] they talk about is efficiency, whether it's supply chain efficiency or other types of efficiencies, and we have products that deliver value in that way. Customer-centricity is another initiative people are talking about, delivering better value to customers and selling more effectively. And there is increasing interest in governance and compliance. Obviously we have a lot of products for securely archiving data as needed. And, of course, a growing interest in the Internet of Things.

So to provide data that is demanded by all these business imperatives, we provide a complete portfolio of products. The most recent one we delivered was product information management, which is getting a lot of traction among retailers that are omni-channel, having brick-and-mortar stores, an online presence, [and] social commerce, mobile commerce and managing commerce across a variety of channels. We will continue delivering more capabilities as part of our overall platform while at the same time enhancing the virtual data machine.

How about yourself? You're coming up on 10 years as Informatica's CEO, if I recall correctly.

Yes, it's been an amazing journey for Informatica. We've grown the company from around $200 million and about 5 percent operating margins to coming up to $1 billion and over 25 percent operating margins. But it's only the beginning. I think we have the opportunity to build a multibillion-dollar organization. We're at the right place at the right time and we're all focused on making sure we achieve that.

PUBLISHED DEC. 27, 2013