Intelligent Enterprise

VentanaMonitor™

Summary

PeopleSoft has signed an agreement to OEM Ascential Software's DataStage and MetaStage as the data integration core of its PeopleSoft Enterprise Performance Management (EPM) solution, replacing its previous agreement with Informatica. The deal leverages Ascential's growing market presence and meets PeopleSoft's current enterprise data integration requirements based on its customers' needs.

Ventana Research recommends that existing PeopleSoft customers using Informatica's OEM'ed PowerMart cautiously assess the migration challenges with business requirements in mind. Depending on your organization's data integration architecture, conversion to DataStage from the existing Informatica offering could be a tough process, but not converting could be tough as well.

Assessment

Ascential Software Corporation has entered into a four-year, multiple product OEM license and reseller agreement with PeopleSoft, Inc. Under terms of the agreement, PeopleSoft will embed data integration software from Ascential Software in its core enterprise applications, and resell Ascential Packaged Application Connection Kits, (PACKs) for several major enterprise software programs like SAP, Siebel and others. This agreement replaces PeopleSoft's existing deal with Informatica, which gave hundreds of PeopleSoft customers data integration capabilities with Informatica's PowerMart.

Tough Negotiation

Ventana Research has learned that the selection of Ascential resulted from a very tough competitive bid process as the PeopleSoft-Informatica partnership agreement came up for renewal. PeopleSoft reassessed its data integration partnership requirements. It reviewed both the business and technology needs of its enterprise application customers, from product solutions to integration requirements. In a pitched battle for a lucrative partnership agreement, many issues come into play: what products will and will not be included and under what pricing and royalty terms; how will sales and delivery channels interact and be compensated; how will PeopleSoft customers be treated and by whom? Ascential evidently proved to have the sharper pencil.

The OEM deal includes embedding Ascential DataStage immediately (this has been in effect since the first of the year) and MetaStage with the next release of PeopleSoft EPM in late 2004. The use of DataStage represents a measurable upgrade in functionality from Informatica's PowerMart. Ventana Research was told that under the partnership conditions established by PeopleSoft, Informatica was less willing to agree to terms with the fully functional PowerCenter as the core OEM product. Also, while Ascential was evidently willing to include MetaStage under the OEM agreement, it is not clear if Informatica was willing to bring its metadata solution to the table.

Ventana Research speculates that two other factors were likely in the mix. First, Ascential and Informatica each have a thorough vision for data integration, but in Ascential's case, the vision is solely centered on data integration. Second, in our opinion the Ascential suite components make it easier to draw lines where the PeopleSoft OEM offering ends and Ascential up-sell opportunity begins, thus reducing the risk of channel conflict.

To Convert, Or Not To Convert?

In a move showing sensitivity to the needs of existing PeopleSoft customers utilizing Informatica, Ascential and PeopleSoft are simultaneously announcing a conversion program to help customers that want to convert to Ascential DataStage. The conversion program follows a multi-step process that has the customer ship its Informatica repository to the PeopleSoft Conversion Center where both packaged and custom maps will be converted and then returned to the customer. The conversion program also provides a consulting resource at no charge to assist with installation, training, tuning and testing prior to rolling into production.

The requirement that customers ship repositories to a conversion facility may seem onerous, but a centralized, controlled environment, where expertise can be accumulated and focused, makes sense for what amounts to a "one-off" event. It would take much longer to distribute the specialized skills throughout the service organization; it would also be more prone to error.

Still, the conversion process is only part of the story. In addition to the obvious software changes, it is likely that the entire system (databases, workflows, processes, networks, etc.) will need tuning, support resources will face a learning curve, and human and financial resources will be consumed in meaningful quantities. The conversion program addresses only some of these issues.

Should a customer choose to stay with Informatica's PowerMart, many of the same challenges will exist. These customers will also lose front-line PeopleSoft support, and if they upgrade to Informatica's PowerCenter there will be new licensing and maintenance fees.

Ventana Research advises its clients not to go quietly into that night. Consider your business requirements as paramount; evaluate the migration process as if it were a new implementation; reach a full understanding of the effort required and expected paybacks. Demand full disclosure from PeopleSoft, Ascential, and Informatica.

Market Impact

This announcement further leverages Ascential's growing market presence and demonstrates its value to PeopleSoft in addressing product and customer requirements for enterprise data integration. As Ventana Research has observed, Ascential focuses its product strategy on delivering a foundation for data integration, with no direct effort in Business Intelligence (see Ascential Releases Enterprise Integration Suite 7.0 & Real-Time Integration Services). In large measure, we believe that this stance worked to Ascential's benefit as it pursued this strategic partnership with PeopleSoft.

A key opportunity for Informatica resulting from this development is to capitalize on the five years' worth of traction in PeopleSoft's customer base it has gained. It is now free to compete in these organizations and elsewhere with its full data integration suite, including PowerAnalyzer and SuperGlue, without threat of channel conflict with a strategic partner. Ventana Research expects them to do just that.

Recommendation

New PeopleSoft customers with no established data integration standards or architecture will gain immediate value from Ascential's DataStage, and soon MetaStage, plus an upgrade glide path to Ascential's full suite of enterprise data integration products for bringing PeopleSoft and other operational applications together in Performance Management solutions.

As described above, current PeopleSoft EPM customers face some very tough choices. If your organization has vested IT skills and budgetary resources in Informatica's data integration solutions across the enterprise, you should consider the potential advantages of continuing to use the Informatica solutions.

If your organization is not already invested in Informatica, Ventana Research recommends that you conduct a full Integration Management priority assessment as part of your conversion evaluation. We also believe that the migration service program being offered for customer conversion is well conceived, and recommend that organizations seriously consider it as part of evaluating a conversion from Informatica to Ascential.