MDM and SaaS: Head in the clouds?


A thoughtful, evolutionary migration of MDM to the cloud is one thing.  Announcing a trend just because it’s trendy is another.

There’s been a lot of coverage of master data management (MDM) in the cloud coming out of the Gartner MDM Summit.  That’s understandable.  What isn’t understandable is the disconnect between some of the headlines and spin, and what’s actually being said. 

MDM in the CloudJust to set the table, discussions about MDM and SaaS have historically taken two different paths.  On the one hand, there’s discussion around the impact that cloud-based applications or processes will have on trying to manage the master data used by those applications.  

For example, as far back as 2006, Microsoft had commented on the rise of cloud-based apps as driving the need to maintain a high-quality, consistent set of master data for the enterprise. In 2008, Gartner’s Andrew White cautioned that cloud-based applications would need to be “MDM-aware,” otherwise “MDM will incur additional costs and overheard that will inhibit its adoption and success.”  

And in 2009, David Linthicum said:

The use of cloud computing, while holding the promise of doing much more with less money, has the potential of driving MDM out of reach quickly… I suspect that the issues around MDM will get worse as cloud computing continues to be a popular option for enterprise IT. 

Going down the other path is discussion of hosted MDM — MDM-as-a-Service, or managing master data outside the firewall.  In that discussion there has also been a certain amount of caution.  For example, four years ago, Ravi Shankar of Informatica (neé Siperian) suggested:

I don’t think MDM is a place to do SaaS as in the model, where you are using the MDM hub to provide services coupled with applications…If you don’t have many data sources and there’s little in-house IT infrastructure, you may consider outsourcing the hosting of the MDM solution. In cases where there are many data sources and strong in-house IT, we see customers preferring to keep the MDM implementation in-house.

Two years later, in an informative discussion on the MDM Community on Ning, several participants reached a tentative consensus that “the idea of moving more master data outside [the firewall], and, maybe moving governance and authorship to a SaaS- or cloud-based deployment, doesn’t appear that far removed for some MDM environments.”

More recently, there’s been some confluence of those two tributaries, centering on Gartner’s concept of MDM-Aware applications. The idea here is that hosted apps should be designed from the start to rely on master data rather than fomenting “silos in the cloud.” But the implication (or perhaps my inference) is that the master data itself would still be managed inside the firewall, using a conventional arrangement of tools and processes.

(As a sidebar, in a short video from last week, Ravi Shankar affirms that there is now a lot of interest among some Informatica customers in moving their MDM applications into the cloud and goes on to outline the advantages in those circumstances. He also outlines the concept of a hybrid environment, with some hosted MDM and some on-premise MDM.) 

However, all that is different from the coverage of MDM-as-a-Service coming out of the Gartner summit.  While the spin is that Gartner projects the “rising adoption of MDM in the Cloud” and that Gartner sees “cloud computing playing a key role in the future of MDM,” the rhetoric is less convicting. Quoting from the piece:

The majority of organizations today are highly skeptical about the prospect of housing valuable master data about customers, products and suppliers in the public cloud — and that prevailing attitude is unlikely to change anytime soon, said John Radcliffe, a research vice president with Gartner’s information management team.

“We can see potentially quite a lucrative future for [some] cloud-based MDM services,” Radcliffe said. “It’s small at the moment, but potentially by 2015 maybe 10% of MDM will be in the cloud.”

“Very few MDM technology and service providers have [developed] specific MDM SaaS or [Platform as a Service] products that are scalable, elastic and multitenant,” Radcliffe said. “But when they do, we expect them to exploit the cloud computing value proposition.”

So in four years, 10 percent of MDM might be in the cloud?  I’m with Loraine Lawson on this:

Gartner isn’t seeing widespread adoption [of cloud MDM and adding customer data from social media to MDM]: A mere 10 percent of “packaged MDM implementations will be delivered as SaaS in the public cloud,” while only 15 percent of organizations are expected to add social media data by 2015. I’m not even sure that’s enough to count as a trend — maybe we should call it “a beginning” or “a few early adopters.”

And what did attendees think? Again, quoting from

Despite what the future may hold, however, most technology professionals, like conference attendee Isabelle Davis, have yet to make any significant connections between MDM and the cloud…

“People are concerned about it,” Davis said. “Companies have barely embraced the cloud in itself, meaning that your data or your software is off-site, and you don’t necessarily have control over it. What happens if it goes down? [Master data] is your core data. How secure is that going to be sitting in somebody else’s architecture?”

Given the recent high-profile failures of the cloud in both performance and security, I too am skeptical that enterprises will be anxious to move to the cloud anything more than master data needed for niche or specialty requirements such as those mentioned in the Ning discussion some two years ago.

A thoughtful, evolutionary migration of MDM to the cloud is one thing.  Announcing a trend just because it’s trendy is another.

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