Yves de Montcheuil of Talend, an OSS vendor that just released an OSS MDM offering, commented on a post of mine, defending (quite rightly) his organizations view of their OSS MDM solution. One comment he made in his post made me think. The comment I thought about was “cost”.
MDM accrues a cost to an organization. That cost includes some obvious and partially up-front costs such as software or subscription, hardware, services, and maintenance. There are other costs that are less obvious and rarely budgeted for related to known and later unknown change management considerations.
MDM also accrues value. Value has been observed and reported related to revenue growth/protection, service level enhancements, reduction in time to market, business agility (though faster IT responsiveness), improved decision making, compliance, improved risk management, cost reduction, and improved operational efficiency.
Then again, independent of real cost and expected value, the price offered by a vendor (of the technology) signals all kinds of things to buyers. For example, I have taken numerous inquiries from end-users that go like this: “I have two vendors: A, and B, both selling me so and so. One vendor’s software price is $500K; the other vendor’s price is “$2M. What functionality is missing in the $500K priced offering? What is extra with the other vendors offering?” Buyers interpret many things from “price”, sometimes a vendors does not predict what..
Another perception is that the higher the price, the more important the investment. After all, the bigger the ticket the more likely a ‘higher up’ manager, or board, has to approve the purchase. Users tend to expect that “larger, more complex, more important programs” will attract higher costs (and offer up higher returns).
So what of an Open Source Software MDM offering like that on offer from Talend? Can users now get hold of a free MDM offering? Will prices for MDM solutions fall precipitously because of this release? Is this OSS MDM offering really free? What are the implications, obvious or hidden? Will users perceive that the introduction of a free version of MDM (the product, not the discipline) suggest that MDM technology is commoditized? Or that the importance of MDM has fallen so low, since the market has taken the price to “zero”?
Certainly, the possibility is that this is what will be perceived. But, just to round out the thought, Talend does highlight that the OSS MDM offering has less functionality than their regularly licensed MDM offering. One could look at the OSS MDM offering as “bait” that is meant to attract users to pay Talend, as they would have paid any other MDM vendor, for the “complete” product
It would seem obvious that OSS provides some downward price pressure on any market where its introduction has taken place. But has MDM technology reached a state of maturity that implies commoditization? If you look at the various technology components of an MDM technology (data modeling, data quality, workflow, analytics, dashboard, data services and so on) each of these parts are to some degree, mature. But is the assembly of all these parts for the purposes of supporting the discipline of MDM mature? No, they are not. Of the many hundreds of end user interactions I have participated in, less than 10 per cent are what I would call “mature” and even those are not “done”; they have ongoing programs to add more domains, more use cases, more regions etc. Certainly the technology needed to support the discipline of MDM is maturing quickly, but is the same as accepting a signal set by an OSS MDM offering?
A price of zero, implied by an OSS offering, should equate to a mature market or a low risk technology, or a faster return. For some, few end user environments, OSS will do some of this. My feeling is that for many, this won’t be the case – yet.
Footnote: Price pressure for many kinds of technology is high; and independent of this, some vendors readily drop their prices for all manner of reasons. MDM pricing has not, thus far, fallen to the floor, but pressure on pricing remains strong.