The Data Landscape Shake-up: Mergers and Acquisitions Unpacked

0:02 Today, Junaid, Karen, and I are doing things a little differently. We're introducing The Prompt, a short format mini-sode to unpack topics in data and AI with sharp takes and real-time reactions. Not to worry, our regular How I Met Your Data format is not changing. We will still have our longer format conversations with our amazing lineup of guests. But in the spirit of growth this season, we're also bringing you bite-sized conversations on the topics most top of mind. Views expressed by me and our guests are our own and do not reflect those of our employers. So grab a coffee, get comfy, and let's dive in.

0:42 Today, we are diving into a growing trend in the data and analytics space. There's major acquisitions and mergers across tech and data players that are shaking up the data landscape as we know it. For example, a few weeks ago, ServiceNow announced that they're acquiring Data.World, which to me was a clear signal that workflow intelligence is only as smart as the data underneath it. And then Salesforce and Informatica finally agreed to terms in a deal that could reshape, in Salesforce's words, the future of AI-ready data infrastructure. So clearly, enterprise giants are doubling down on governance, cataloging, and integration.

1:27 And I think many of us are left asking, what does this mean for the rest of us? So before we really get too deep into the conversation here, any immediate reactions to these acquisitions or other acquisitions or mergers that we've seen? You know, for me, it's not a surprise, right? that this acquisition has sort of been in touch for a year or something like that. And so not surprising. They got a $2 billion discount, I think, from a year ago. But no real surprises for me. There's this acquisition, but then there's also, which is a data point, but I think we see a trend between the Caster acquisition by Coalesce and also Data.World for ServiceNow.

2:11 So clearly, I mean, if you need any affirmation that data governance is the core of, I'll go out and let them hear success with AI or agentic activity, that is, you don't need any more demonstration of that by billions of dollars. I mean, we're really, that's, that's more than just talking. That's an actual like affirmation in the market. I think you'll see continued acquisitions, like the amount of companies that have spun up in the data and AI space, not just, you know, five, seven years ago, but especially the last two, three years, the number of companies that have jumped into the game. I think that that number is only going to increase in the coming, you know, let's say two, three, four or five years.

2:56 And then you're going to go, you know, have a period of consolidation. it. So I think, you know, this is a merger of two huge companies, but I think you will see this sort of continuous acquisition activity that'll happen. Yeah, I agree. I wasn't overly surprised that this boomeranged back from a Salesforce and Informatica perspective, just knowing that it was quite the talk April of last year, and now it's come back. But Karen, you bring up an interesting point and, you know, one that back in kind of as I was coming up through the data and analytics space and I was working for a software vendor.

3:38 One of the things that we really brought forward in our go-to-market conversations was vendor lock-in and how these giants were actually locking in their customers. They do a lot of things, but none really well. So they're jack of all trades, but an expert and not. So with these acquisitions and this growing trend, do we think that we're going back to a world of vendor lock-in? I think it's a paradox if I were to bring, address that question in the sense that, yes, they want to be, and it's a lot of things, but in answer to your question directly, I think multi-cloud is just status quo now. Like that's an acknowledgement that your data is in many places. And so there's competition when you talk about vendor lock-in, perhaps that who's going to be the focal point where all of it comes together.

4:25 And I think that's what you're seeing is that they want the source of truth. Salesforce wants to be that source of truth, which is what has been the Achilles heel or weakness of their market strategy so far, and that you need a lot of different components to make it work. And more specifically, also, a lot of the regulatory challenges that so many organizations are starting to see more and more, and that it's, I think it's fair to say, a lot of spreadsheets. You got to make a change. And so how do you become that focal point, that center of gravity for your whole data experience, I think this is a clear indication of how they're solving that problem. The interesting thing about this merger is I think it's, you know, when we talk about data and AI, this is.

5:09 I think Salesforce's recognition of data being essential for AI, right? Like, it is the clearest, you know, you know, Informatica is an industry leader in the space of data management, data governance, data integration. And, you know, we all know that AI is not a sort of passing term, right? Or something that's a fad that's going to go away. And I think that the, you know, the shift, Like this is a clear shift that, you know, to be AI ready, you've got to take data especially seriously. So it could be interesting to see the products and innovation that comes out of an acquisition like this.

5:54 I think the core to success for any acquisition is how some of the parts come together, right? So really creating a one plus one equals three or more model. And it comes down to the integrations. So that, to me, was a big red flag in terms of, oh, God, this could really go poorly for a lot of organizations if that integration across these systems isn't really done thoughtfully or is not done well. You know, acquisitions are always interesting. You know, I was first as a bank, which acquired CIT Bank and Silicon Valley Bank.

6:35 And I think, you know, the data integrations, you know, capabilities and data integrations and system integration. The biggest inhibitor, honestly, that I've seen is that there are people silos and culture silos versus technical limitation. I feel like we're in a day and age now that any technical issues are overcome relatively easily, but it is the cultural and the people silos that I think make integration really hard. And I don't know enough about Salesforce culture or, you know, if Mousekos culture, but I'm curious to see how that aspect of it plays out.

7:20 I mean, there's so many different ways to skin a cat. But yeah, I think there's other market approaches to solve that problem. I think we've seen Unity Catalog, and there's been an intention to try to create open source solutions to manage that. However, you know, that's really from an enterprise standpoint, there are very specific requirements to manage to attest to having, you know, enforcing your governance practices or doing what you say you're going to do. But then to your point, Junaid, then there's the next level of where it actually has meaning and you're cooking with gas, so to speak, which is the people part where everyone actually.

8:01 Among the different groups, trust the data enough to collaborate together. And that's, as we've all seen, I'm sure, really the point of failure. And I think this is really solving that lower level problem that everyone's seeing in the market from an enterprise side of the business of why do we want to go with Salesforce or ServiceNow, for example, and because you can check that box, right? And what it enables or you can build upon because ultimately when that data governance isn't in place, whatever you do is just exacerbated. Mostly bad, but if it's good off, I mean, then you can really run with it, obviously. And that's literally the selling point. Yeah. I mean, I've been involved with a number of environments where it's Salesforce driven.

8:44 And now the organization that we're working with is looking to also integrate master data and actually think about master data holistically. But because our conversations begin from a CRM perspective, we end up in a situation each and every time where the scope of what we ultimately master is only what lives in CRM, whether it's Salesforce or, you know, another CRM tool in the market. And so now you've got blind spots across your organization because your master data does not truly reflect your enterprise. And so that was one of the concerns that I had was I've seen that happen multiple times.

9:27 So now, will we actually see a fully enterprise-facing solution from a master perspective that is able to satisfy the CRM need? It's going to be an interesting journey for sure. I think, you know, I, you know, again, I think that this is a good thing. I think that these are two big companies, both leaders in their. Spaces. I can only see good things coming out of this acquisition. It may take a couple of years, but, I think it's going to be a good fight. I mean, we'll see. It's feast or famine. And those that are left in the market, like point solutions, are really going to have to make a greater case for how they are solving problems in the market.

10:15 So we're living in exciting times. We've touched on so many topics, but so much of our conversation came back to data governance. What do you think that this signals for data governance and AI readiness? Governance, metadata management, they're becoming cool, or at least that's what I'm telling myself. But are we just kind of relabeling old problems with a shiny new wrapper? Or are we actually going to see things being done a little bit differently? I think the former. I think for like, you know, I've seen very few companies that really ever solve the core problems. Like, you know, every time I go to a conference, it's always the same topics.

10:58 How to improve their data quality, how to do better metadata management. If you look at the agendas of conferences from 15 years ago to today, if you just take out the AI component of it, it is always how do you find efficiency? How do you strategically implement these core capabilities like metadata management, data quality? It's always the same kind of things with a new twist. You know, data products came up a few years ago. And, you know, data, you know, the notion of data products is predicated on having really good metadata management. So the angle became, hey, you should build data products. And the prerequisite is go do good metadata management.

11:41 So I personally believe it's, you know, unfortunately, and maybe this is another topic for another day. why are we solving the same problems that we have been for the last 15 years is another, I think. But I think it's the former, which is another angle at this. I'll be the cynic. Yeah, I think I'll go, I'll extend and say we've been doing the same thing ultimately for about 30 years and we're relabeling it to put it nicely. And there have been a lot of different ways to spin or come up with new vernacular often generated by Gartner. And I mean, when you separate the sales jargon versus the ultimate goal. I think everybody is trying to create a better mousetrap, so to speak.

12:24 But clearly, despite all the shiny things and new words, it's the same problem. And often we seem to be recreating these problems and restating them over and over again. And so those who have been around long enough are like, hey, this has been done before. And so I'm seeing that often even on LinkedIn comments. And so I think the difference is ultimately the consequence. And that's really, I think, what's given this lift where it hasn't before because of the revenue opportunities that you can, in theory, for a lot of these more brick-and-mortar companies. Capture revenue because of that. So now it's garnering a lot more attention. And we'll see how it plays out as everybody is kind of fumbling through what is going to work for us.

13:08 I've seen the wave of how do I create a really pretty dashboard? How do I expose data products, things like that? And it keeps coming back to those are end user experiences. So ultimately, it's how does the plumbing and the data best support how my users need to use access and understand their data and so that fundamentally has not changed because we've applied I'll call it minimal attention to the plumbing and really at what the end user experience is intended to be I think you hit the nail on the head Anjali you said it and like the probably the best way which is that these things are the end user views and like the outcomes that we're trying to achieve.

13:55 So we haven't solved the core problems to make the data really leverageable. I have this joke about like what big data is and I was saying it's just data that we forgot to delete. Right? Nothing more to it than that sometimes. But I think you hit the nail on the head, Angela. So any closing thoughts on what we expect to see in maybe the next three to six months? I'm not sure about the next three to six months, but I do think in the next, like, you know, 12 to 24 months, you'll see more consolidation. You'll see more companies spin up and you'll see more consolidation or more acquisitions. I mean, it's the ultimate, you know, economic theory and practice of, yes, consolidation, those acquisitions.

14:39 The strongest product offering are going to survive and there's going to be a lot that don't. So it'll be very exciting to see how that plays out in reality for those that already are, for example, Salesforce or ServiceNow customers and what the reality of the implementation is. Because the other side of it is like, cool, they've all been acquired, but how do you actually integrate it in so it does the thing that you wanted it to do when you originally made that acquisition? Yeah, I mean, my prediction is we're going to see a cycle of consolidation and then it's going to stop. Not because there's no more consolidation opportunities, but because we go back to an old conversation around vendor lock-in and organizations no longer want a single throat to choke and are looking for capabilities that best fit their needs or fit for purpose.

15:31 And we'll start going to smaller vendors again to find who can do what they need the best and then figure out how to string it together. As the pendulum swings, right? Or as the world turns, these are the days of our lives. Guys, thank you so much. This was the conversation I needed to have this week. Reading all the posts, reading all the news, and I'm so excited that you were able to share your time and your opinions with me and our listeners today. Thank you.