MDM Acquisition Frenzy – Siperian & Initiate Rumored to be Acquired by Informatica and IBM Respectively

On Brendon Daly’s blog at the 451 group are two posts which if true will absolutely rock the world of MDM software.

On Jan 25th he reported that Initiate Systems is to be acquired by IBM and just today he has posted a rumor that Siperian (disclosure, my former company) will be acquired by Informatica as early as this Thursday.

While none of these moves are a big surprise, see my previous posts on MDM M&A: 

• Oracle Acquires Silver Creek Systems, Does The MDM World Care?
• Lombardi Acquired by IBM – More MDM Ecosystem Consolidation?

it reflects the continued consolidation and bargain hunting that the big boys are engaging in to expand their revenue footprint, as well as to acquire significant technology in growing markets.

IBM’s rumored acquisition of Initiate would be somewhat strange given that they acquired DWL and Trigo over 5 years ago to form the core of their MDM Server platform. However looking beyond MDM, Initiate has been very successful in Health Care and recently made some significant acquisitions of its own. The large amount of funding due to come from the Obama administration around health care might also explain any premium IBM is rumored to be willing to be pay. 451’s Brendon Daly also speculates that Initiate’s failed IPO and any possible future attempt at public markets may have positioned it for a higher valuation.

As for Siperian, their close relationship with Informatica was made even closer last spring when AddressDoctor was acquired by Informatica. This followed the purchase of Identity Systems. Both companies were major OEM components for Siperian. Additionally Lombardi Systems acquisition of IBM and Oracle’s acquisition of Silver Creek continued to eat away at Siperian’s MDM partner ecosystem. Meanwhile Informatica had been consistently acquiring other pieces of the puzzle, buying Agent Logic for complex event processing as well. Kudos to the management team at Informatica for their methodical approach in acquiring pieces, not only for MDM but equally applicable across all lines of their business.

If the rumors of IBM and Informatica’s acquisitions are true, it marks the end of a couple of great best of breed MDM players who really delivered innovative technology that won deals against the mega vendors. It also means that with Initiate and Siperian out of play, SAP, HP, EMC and any other vendors interested in picking up pieces of the MDM puzzle have pretty slim pickings to choose from. Kalido, Orchestra Networks, Visionware are still available but Initiate Systems and Siperian were clearly the last two crown jewels left in the MDM space.

We’ll wait to see if the rumors come true and if so what the valuations end up being. With the IPO market not what it once was, exit by acquisition at a favorable valuation is clearly the only route for private software companies.