The benefits of cloud computing have been written up and proven in every way imaginable. You need only to look at the rapid growth and ascension of popular consumer sites such as Facebook, LinkedIn, and more recently Uber and AirBnB to see that cloud infrastructure delivers both economic value and business agility. For those of us in the B2B enterprise space, proof points abound from Salesforce.com to Workday and others, it’s undeniable proof that the efficiencies, and cost savings of not just cloud, but multi-tenant public cloud is what is powering the business economy, and driving competitive advantage.
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The naysayers were dealt a particularly significant blow when the CIA selected Amazon Web Services over IBM for their Cloud back in 2014. In a report detailing why the CIA opted to pay AWS a 50% premium over IBM’s bid was that “it was really all about the applications”. But data-driven applications aside, why are some industries and groups still so anti-cloud?
Master Data Management (MDM) as a segment in particular has been reported by Gartner as slow to adopt cloud. A November report titled “Master Data Management – No Headlong Rush into the Cloud” even goes so far as to say:
“While SaaS MDM is increasingly becoming available, the primary choice axis for end-user organizations is either lower cost of entry into MDM solutions or robust customization/configurability. Cloud-based MDM enables flexibility but at higher cost in the long run, meaning information and MDM program leaders will need to develop TCO models for any prospective cloud-based MDM solutions.”
At first glance, it may seem that Gartner is saying that it’s not economically viable to deploy cloud MDM, and you shouldn’t consider it. But really what the report is pointing out is their contention that you can’t have your lower infrastructure cost cake and eat it too.
Gartner’s belief is that cloud MDM = hosted MDM, with “lower cost of entry” driven by no hardware to buy or upgrade. Unfortunately major companies like IBM and Informatica have done nothing to dissuade this notion, continuing to offer cloud offerings that are nothing more than “wolf in sheep’s clothing”.
Their reasoning is based on an incorrect premise that customization/configuration, and in other words the business agility, and capabilities of true cloud MDM solutions lag behind that of legacy on premise offerings that are 10+ years old.
That may be true for vendors who have decided to deploy cloud MDM offerings that essentially have focused on cost reduction. Even giving them names like “Cloud Edition”. But they are missing the mark. Just as Salesforce.com delivered a better CRM than Siebel, Workday a better HR than Peoplesoft, cost is just the tip of the iceberg.
In that spirit, we have separated out the 10 reasons into 5 that are savings related, but 5 than can actually save your business.
5 TCO SAVINGS
- NO HARDWARE (OR SOFTWARE) TO BUY OR MAINTENANCE TO PAY
This is a no brainer, you can justify this on the back of a napkin in about 10 seconds. An annual subscription fee replaces upfront capital outlay, enough said.
- NO IMPACT UPGRADES
The key here is the cost of upgrades. Like Salesforce.com, true multitenant public cloud MDM providers are able to deliver new functionality on a regular basis (usually 3 times a year) with no impact to existing customers. You get a message saying your system will be upgraded tonight, and the next morning you get access to new features, some of which you selectively choose to enable. Contrast this with the millions of dollars that continue to be spent on legacy upgrades of on premise MDM tools, and the ongoing angst of expiring support agreements on older releases.
Hosted offerings will also claim this level of support, but the reality is that running an on premise platform in the cloud, does not make it more easy to upgrade.
- NO OBSOLESCENCE – TECHNOLOGY INSURANCE INCLUDED
What premium would you have paid if you could have bought insurance that paid you out as follows:
““The insurer will pay the cost of hardware, database swap out, and implementation if a technology comes along that has the name of “Hadoop” or “NoSQL”. The insured will also be entitled to a full payout if names are eventually replaced by others that may or may not focus on more flexible Graph and In memory capabilities.
Sound too good to be true? The best cloud platforms are modeled after Internet giants, with configurable metadata, offering complete separation of capabilities from the underlying technology foundation. Allowing them to take advantage of the latest offerings, to deliver new functionality on behalf of their customers without missing a beat. Insurance included.
Hosted offerings that also claim this level of support again face similar constraints as the on premise version. Just running it in a public cloud through managed services does not change any architectural constraints that may exist.
- NO WASTE
When you initially size the hardware capacity for your legacy MDM tool, you’ll often have to budget for projected max capacity, this could lead to “over-purchase-ritus” (I have this problem every time I visit Costco). With cloud, you get to elastically scale up and scale down processing, storage and software user licensing. You pay for what you need and use, no more, no less. That is more predictable and fair.
- NO MORE SERVER BABYSITTING
Cloud MDM should alleviate you from having to worrying about backups, archiving, downtime. The best cloud platforms exceed 99% in their SLA commitments. You get peace of mind and can free up resources to focus on other areas that need attention. This is table stakes. If you are offered hosted MDM in the cloud, make sure the SLA guarantees are up to your business requirements.
5 BUSINESS VALUE BENEFITS
- FASTER DATA ONBOARDING
One of the biggest challenges of MDM is not necessarily just running the matching and cleansing of data from numerous sources, but actually getting the data into the MDM tool in the first place.
For 10+ years data has been acquired/purchased from 3rd parties such as Dun and Bradstreet and IT has had to set up processes to load data in batches into the “hub”.Complete cloud platforms now offer Data as a Service (DaaS), providing an always on, searchable connection between 3rd party data and the data management platform. The same connection also provides access directly to the fingertips of business users on mobile devices. Amazon-style one click acquisition of data is now possible, but only in the cloud. The savings in efficiencies and data delivery are priceless.
For modern data management platforms, data-driven applications are part of the complete solution. There is zero integration! Legacy applications that require up-to-date data pushed downstream can benefit from cloud MDM’s next generationmicroservices. Eliminating the complexity of java wrappers, and convoluted API formats to deliver and receive data.
- FASTER BUSINESS ACCESS
With interfaces as easy-to-use as Google, LinkedIn and Facebook, users already know how to use a cloud based data management platform and data-driven applications. Not so legacy tools that merely have been moved to the cloud in a hosted manner.
If you want to find records, you simply type in a free-text search term, just like you do with Google. To find a relationship or hierarchy, the system presents the connected entities (people-to-people, people-to-org, org-to-org, people-to-products) in literally limitless configurations.
To research and bring in data from social sources and 3rd party vendors, a single-click is all that is needed to onboard and blend data together. Need to know what happened to a record or field within a record? See the full audit history, with MS word-level revision history by attribute.
Want statistics on attribute distribution or data quality levels? It’s built into the role-based dashboard.
Need to have better match rules? The system uses machine learning to give you better matches, and can also provide your business users with in context, personalized recommended actions. Productivity is your best cost-buster.
- FASTER COLLABORATION
Beyond the basics of workflow processes, approvals of changed records, the drudgery of manual data steward verifications, visually reviewing potential matches, there is also the issue of gathering consensus on data. Modern cloud data management platforms include Yelp-style voting and ranking capabilities built-in. This capability supports not just data steward team inputs, but actual business users who are interacting with and leveraging the data daily. Imagine if every single one of your thousands of sales reps are contributing towards your data quality, augmentation and competitive advantage. Again even if cost savings is measured in terms of reduction in effort, shared business value is infinitely more valuable.
- FASTER 360 INSIGHTS
Cloud MDM is great, but even better when the “M” stands for “Modern” not “Master”. Today MDM is like water and oxygen, critical as a reliable data foundation for a new breed of data-driven applications that deliver relevant insight. It’s the straw that stirs predictive analytics and better decision-making.
So why just focus on Master data profiles and traditional MDM? And why just accept an incremental benefit of hosted MDM in the Cloud when you can give your business the full power of the Cloud.
Cloud is an opportunity to manage all data at scale. Why not have the ability to handle that pesky Big Data (maybe you’ve heard of it?) transactions and interactions, and seamlessly have both a comprehensive data management platform for all data sources, types, at any scale. And have both analytics and operational execution in the same suite of applications! Impossible at any price? Actually you can have it all for less than the cost of traditional on premise MDM.
- FASTER BUSINESS VALUE
You’ve heard of the “mythical man month” or “you can only squeeze so much juice out of an orange”. Legacy systems that have fixed data models, stored in 30+ year old relational database technology, cannot deliver business agility, no matter how much money you throw at it, or if you place it into a hosted cloud environment.
You end up reducing cost but you also reduce your opportunity to be agile. Only a modern cloud platform using new capabilities like a hybrid schema-less NoSQL store with graph technology (read about the benefits of graph in Forrester’s report MDM at the Crossroad – to graph or not to graph) that has limitless flexibility can truly change the game. Configurable to meet your business needs in minutes.
THE VERDICT? 5+5 SHOULD BE > 10
After 10+ years of on premise MDM, companies are still struggling to get a true customer 360 and something as basic as mapping Dun & Bradstreet hierarchies to ones that actually reflect how they do business.
Ironically Gartner’s report that calls for a TCO assessment of cloud vs. on premise has thrown down the gauntlet to cloud MDM vendors. They are demanding that they prove that their functionality is better than those of their elder, on premise counterparts. After all, there is no disputing the pure physical cost savings that cloud delivers.
Collectively the time-to-value of a cloud-based solution is what is needed to stay competitive. Those that stay on premise are tempting fate. Cost savings aside, those who want to avoid going down the path of businesses like Kodak, Blockbuster and others need to embrace cloud for modern data management at any cost. It will literally save your business.
Chief Marketing Officer at Reltio, a provider of a modern data management Platform as a Service (PaaS) and enterprise data-driven applications. Mr. Chen is a widely read blogger and guest author on the topics of MDM, Big Data and Cloud Computing, and is also a frequent industry speaker and panelist. A former software engineer, he has spent over 25 years developing and marketing Enterprise, Cloud and Big Data software. Most recently, prior to Reltio, Mr. Chen was VP Product Marketing at Veeva Systems, and before that he was part of the core team at Siperian, a market-leading MDM platform acquired by Informatica. He received his Bachelors in Computer Science from the University of Essex.
Copyright – Ramon Chen, Chief Marketing Officer, Reltio