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With the race to the cloud and digital modernization, many companies are experiencing increased data fragmentation, data dispersal and technology sprawl.
But with the bombardment of increasing amounts of data, organizations are recognizing the importance of data management and centralized systems to innovate their data and achieve digital transformation.
It is against this backdrop that demand for cloud-based services to enhance data management and integration-platform-as-a-service (iPaaS) is on the rise. In fact, it is a market with such increasing demand that has drawn out more providers, with top companies competing in this space including Informatica, Workato, Boomi, Celigo, Zapier, MuleSoft, SnapLogic and TIBCO.
The enterprise data management market is anticipated to gather revenues of $126.9 billion by 2026, growing at a Compound Annual Growth Rate (CAGR) of 9.3%, according to Research Dive. Meanwhile, according to ReportLinker, the iPaaS market is expected to grow from $3.7 billion in 2021 to $13.9 billion by 2026, at a CAGR of 30.3%.
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Set apart with vast iPaaS market share
Informatica, for its part, has repositioned itself to meet a growing need and as a result has experienced rapid, massive growth. The Redwood City, California-based enterprise cloud data management and iPaaS company opted to go private in 2015, then returned to the public market on October 27, 2021.
The company competes in five Gartner Magic Quadrants and has been identified by the firm as having the largest global market share in iPaaS — evidenced by its recently announced 2021 Q4 earnings: The public-turned-private-turned-public company has seen significant gains across the board, from revenues to subscriptions to its customer base.
Informatica’s most recent offering is its Intelligent Data Management Cloud. The cloud-native, low-code/no-code platform is designed to help businesses scale their data management and innovate with their data on any platform, any cloud, multicloud and multi-hybrid, explained CEO Amit Walia. It is driven by Informatica’s CLAIRE engine, a metadata-centric, AI-powered technology that learns a company’s data landscape as a means to automate manual tasks and provide recommendations and insights.
As Walia noted, Informatica considers itself the “Switzerland of data” because it services companies — of which there are many — existing in a “hybrid, multicloud world.” Many organizations concurrently use cloud services such as Microsoft Azure, Amazon Web Services, Google Cloud, Snowflake and others. Informatica’s platform has the capability to bring these all together, Walia explained, to help customers wrangle enormous amounts of data and thus accelerate, modernize and migrate.
The Intelligent Data Management Cloud was designed to help companies with data warehouse, lake and app modernization, as well as data governance and privacy. It also helps provide intelligent 360-degree views across a business. As Walia pointed out, companies are looking to democratize data and digitize across their entire value chain.
Beyond providing a single source for data, improving data quality and enabling end-to-end process automation, cloud-based data management overall helps businesses to improve decision-making processes and customer experiences, bolster their security and compliance and reduce costs, Walia said. Looking further afield, companies can begin to realize the capabilities and opportunities of metadata and autonomous master data management (MDM).
Walia identified several driving forces in the market, including the rise of the subscription economy and the “explosion” of cloud modernization and the multicloud hybrid world.
“The cloud is a big vector of our roadmaps,” he said. “The cloud is growing faster for us than anything else, on a significant scale, across the globe.”
The company helps customers process more than 27.8 trillion transactions in the cloud every month, and that trend is growing exponentially as companies look to manage data in the cloud. In its earnings release, Informatica reported that its cloud annual recurring revenue (ARR) in Q4 2021 increased 40% year-over-year to $317 million.
Meanwhile, subscription ARR in the fourth quarter increased 32%year-over-year to $802 million. In the fourth quarter, 59% of the company’s total ARR was driven by subscription. Walia pointed out that, in 2016, after Informatica went private, their subscription business was less than $100 million. Now, they are positioned on a path to $1 billion in subscription ARR.
Additionally, Informatica reported total GAAP revenues in 2021 of $1.4 billion, an increase of 9% year-over-year, and total GAAP revenues in Q4 of $406.7 million, an increase of 8% year-over-year.
And the company continues to expand its customer base: At the end of 2021, it reported 153 customers who spent more than $1 million in subscription ARR, an increase of 47% year-over-year. Many of these are giants in their respective industries: Charles Schwab, Eli Lilly, Kroger, Rolls-Royce, T-Mobile and Bank of Montreal. Walia noted that, by using the Informatica platform, customers have seen a 324% return on investment, a $2.25 million annual benefit and a 62% boost to monthly revenue portfolios.
All in all, the transformation has proved a highly advantageous choice for Informatica. Walia explained that, after 22 years in software enterprise, the company went private in 2015 to assess how it could respond to emerging market trends and increased customer demand. This embodied what he referred to as “Interpreneurship,” or entrepreneurship inside a company, instead of the traditional sense. Informatica invested heavily in R&D has fundamentally expanded its market while increasing its engagement with “hyper-scalers” of the likes of Google Cloud, Microsoft Azure, Snowflake and Databricks.
The company has more than 650 active partners and it is growing across all verticals, most notably in the healthcare and manufacturing industries, the public sector and financial services. Previously hampered by regulatory governance, financial services companies have been making the shift to the cloud in greater numbers.
All told, Walia touted Informatica’s paramount focus on customer success and retention for its significant, continued growth.
“Our cloud-first strategy is resonating with our enterprise customers,” he said, “who are looking for an end-to-end data management platform that offers them the flexibility to manage data across any cloud, any system at enterprise-scale.”
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