On 23rd February, 2023, Informatica hosted an industry analyst event to present the company’s performance from the previous year and its vision for this year. The event was briefed by Informatica’s CEO Amit Walia, CMO Michael Mclaughlin, and CPO Jitesh Ghai.
The highlight of the event was the company’s announcement of its sole focus on offering the cloud-native, cloud-first Intelligent Data Management Cloud (IDMC) product. The stakeholders also introduced the company’s new tagline “Where the data comes to life,” reflecting the company’s vision to fuel the data with automation and intelligence for users to drive effective business.
Cloud-first Strategy
Realizing its vision to become a cloud-only company, Informatica announced that it has successfully transitioned all its products to cloud. Hence, as a cloud-first, cloud-native platform, from 2023, IDMC will offer a complete set of data management capabilities under one platform. Amit Walia, CEO of Informatica, explained that the platform will be a multitenant microservices-based architecture driven by open API and powered by the CLAIRE engine. CLAIRE is an AI-powered data and intelligent metadata automation-driven engine to drive productivity for data professionals. This revolutionary step is not just to offer the whole set of capabilities on a single platform but also to provide more value to customers in terms of automation and intelligence through cloud-only offerings.
Addressing concerns for the existing clients, the Chief Product Officer Jitesh Ghai clarified that Informatica will continue releasing product updates to support its on-premises customers along with helping them modernize and migrate to IDMC.
The Pricing Strategy
The new cloud-first strategy brought a shift in the company’s pricing model – from subscription-based to consumption-based approach. This strategic change in pricing is designed to empower the existing and new customers to avail all the services at a single pricing scale called Informatica Processing Unit (IPU). With this innovative pricing model, users can customize, utilize, manage, and control all sets of services as they choose. The ultimate goal of this strategy is to enable users to experience the full potential of its data management offerings in the cloud.
The company provided absolute clarity on the topic of the new pricing being effective for the new customers, while not affecting the existing users. The company will assist its existing users to renew their on-premises offerings and transition to cloud. Moreover, with this innovative consumption-based pricing model, the company will also explore more use cases in other industry verticals to serve a larger customer base.
Company Performance and Product Vision
Informatica’s financial performance stats for the FY 2022 strongly reflected the company’s growth in scale and a strong bottom line in terms of profitability and cash flow. The company’s major revenue source was on-premises subscription-based business, which is still growing in 2023.This cash flow enables the company to innovate and overcome user-specific challenges. A noteworthy change is that Informatica is targeting to reduce its maintenance base in its cloud offerings, which would provide more cashflow for reinvesting, thus helping to upgrade the company’s customer base. Additionally, the enterprise investments in sales and R&D teams will also be focused only on cloud-based offerings.
Referring to this new product offering as modern data engagement, the company also took this opportunity to provide its roadmap for the same. The market constantly evolves, creating a need for diverse use-case specific offerings. Informatica recognized this when it released a broader set of capabilities in 2020 to support all data management needs. The company’s advanced platform enabled the customers to integrate, connect, cleanse, and automate their data with a single source of truth for governance and protection. Presently, Informatica is undertaking the next step to redefine data management into a cloud-only consumption-driven platform. The CLAIRE engine will provide intelligent insights and data-backed prediction. This change will have a more enhanced cross-product experience for the users.
Insights Into the Market
Quadrant knowledge solutions conducted extensive research on multiple studies from various domains and interacted with many industry leaders to understand their view on cloud migration strategies. The adoption of cloud technology has been a prominent trend in the market since 2020, and this trend is expected to continue as organizations realize the need to remain competitive and adapt to the changing market conditions.
Our analysis indicates that there is a gradual shift towards cloud adoption, with a significant move expected in the coming years. Furthermore, organizations are increasingly recognizing the benefits of cloud-based platforms, as they provide greater scalability, flexibility, cost-effectiveness, security, and innovation.
Industries dealing with sensitive data may eventually move to the cloud after carefully evaluating the benefits and risks of cloud-based solutions. They need to develop a comprehensive strategy that addresses concerns related to security, compliance, data ownership, and cost. However, it is important for organizations to carefully evaluate their specific needs before making a decision to migrate to the cloud and have a solid plan for managing and securing their data in the cloud. To sum up, Informatica has clearly taken a significant step by innovating for its clients with a cloud-centric approach. It will provide a much broader value proposition for users to efficiently manage their data and extract insights for more empowered business decisions.
Author: Sreejith PS, Analyst, Quadrant Knowledge Solutions.
