MDM: Buzz-Worthy Since 2000, But Still a Back-Breaker

MDM has always had the classic tech-industry buzz worthiness surrounding it: it’s a three-letter acronym (check); not everyone knows exactly what it stands for (check); there’s confusion over whether it’s a technology or an enterprise strategy aided by technology (check); and there’s ongoing uncertainty as to when to take it seriously (check).

MDM has come along with a memorable catchphrase—MDM: Helping companies get to “one version of the truth” (check).

Vendors playing in the master data management space have done their part as well—amplifying confusion and user skepticism by placing the MDM moniker on all kinds of enterprise software, information management, customer data integration and CRM products. Classic buzz-building strategy!

Even with all of that working against MDM, recent research from Gartner shows that MDM’s potential is still there: Worldwide MDM software revenue is on pace to total $1.3 billion in 2008, which is a 24 percent increase from 2007 revenue of $1 billion.

In total, the market for MDM is one of the fastest-growing software segments, states Gartner, and that growth should continue through 2012, when revenue will total $2.8 billion.

Gartner analysts, including research director Chad Eschinger, say that despite the current economic crisis, business pressure to reduce costs, increase organizationwide effectiveness and meet compliance requirements are driving the adoption of MDM-related technologies.

“MDM technology can help organizations achieve and maintain a single view of master data across an entire enterprise, enabling business and IT initiatives to perform in better unison, allowing for opportunities to increase revenue, reduce costs, achieve effective compliance, reduce risk and improve business agility,” notes Eschinger. “The technology continues to mature and has great potential for enabling more-efficient and effective business processes in the future.”

Ahh, the dreaded “P” word: potential. Even with $1.3 billion in 2008 sales, MDM is still dogged by its potential label. The simple reason is that it’s just plain hard to do. And even harder to do well. I profiled Nationwide Insurance’s herculean MDM efforts in 2007, and it was one of the most complex stories I ever had to report and write. To those business and IT people who pulled it off, I tip my hat.

Gartner’s Eschinger notes that the range of vendors and technologies that make up the MDM market “make it both confusing and dynamic,” he says. “While MDM is a discipline enabled by technology, there is no single technology that meets all MDM user requirements. Products marketed for MDM initiatives vary by technology, industry, data domain and use case, and many span multiple domains.”

On top of that, the global economic meltdown will most likely give companies another excuse to put their MDM efforts on the back burner, waiting until “MDM’s value is widely proved,” Eschinger states.

Hey, how about: “2009: The Year of MDM.” Heard that one before? Yeah, me too.