Informatica CEO Abbasi on data, scale, leadership, and innovation

Summary:Informatica's chief executive Sohaib Abbasi has led his company for a decade. Here's where he hopes to take the company's all things data mantra and the scaling challenge.

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Image: Informatica

Sohaib Abbasi recently passed his ten-year anniversary as chief executive of Informatica, which has doubled its revenue since 2009 to deliver $1 billion in annual sales.

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To put Abbasi's tenure in perspective it's worth noting that Hewlett-Packard in the last decade had six CEOs, including interim ones, and Yahoo had seven fully-installed CEOs. SAP over the last decade has had two teams of co-CEOs, with one-half of the second duo later flying solo as leader. And CA Technologies has had three CEOs during that spell.

Informatica's $1 billion-in-sales mark is also worth noting because it often serves as an inflection point for enterprise software companies. 

Some vendors pass $1 billion and simply keep growing after a few growing pains. Oracle, SAP, Microsoft, and others hit that revenue mark — think Novell — and run into a brick wall.

Abbasi's challenge now is to scale Informatica into a $3 billion company. Clearly, the stars — cloud, mobile, social and big data — have aligned with the data integration company's strategy. Companies' lifeblood is data and, to really tap into analytics, they need technology to pull information together from multiple systems. Informatica spends 17 percent of revenue on research and development to solve those data integration issues.

Informatica will have its growing pains. The company's fiscal second quarter highlighted challenges in key industries, sales execution issues, and management shifts. For instance, Informatica's senior vice president of worldwide sales John McGee recently left to go to security firm FireEye. Meanwhile, chief financial officer Earl Fry, recognized by Institutional Investor as a leading CFO, will be involved more with company strategy in the future.

Like other software companies, Informatica has to navigate the shift from a business model based on licensing to one that revolves around the cloud and subscriptions.

Here are some of the highlights of our conversation:

The company's reliance on financial services customers and the most recent quarter. Informatica's second quarter results highlighted how the company's customer base is broadening. Historically, financial services was the number-one industry for Informatica — now it's healthcare.

"Of our top 25 deals, only two were financial services. We had certain execution issues and are taking steps to address [them]," Abbasi said, referring to Informatica's management reshuffle. "But there's also a much more cautious spend environment in financial services."

Abbasi added that financial services as an industry is being redefined. The industry used to reward risks, but fines and regulations have curtailed that. Instead of too big to fail, there's a possibility that financial services companies are not too big to innovate. "Financial services companies aren't the early adopters and first movers they used to be," he added.

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Where's the innovation? Abbasi said industries doing interesting things with managing and mining data are retail, telecom, and oil and gas. All three tap into multiple data lakes and use Informatica to put the information together. In retail, the data efforts revolve around identifying not only the top customers, but the ones who have the most influence on social networks.

Abbasi said the company's Master Data Management 10 is designed to track how customers engage via mobile and social and the relationships involved. In telecom, the data efforts revolve around pitching customers at just the right time — especially as prepaid plans gain in popularity. In oil and gas, the data lakes are tapped to find out the best places to explore.

The IT sea change. "The last 30 years of technology has been about improving productivity, automating transactions and putting in infrastructure," Abbasi said. "Today it's about more engaging ways to interact with people, customers and suppliers too. There are new data interactions, not just transactions."

To enable that sea change, Abbasi argued that Informatica's role as the "Switzerland of all things data" allows the company to integrate with various systems and data repositories, and prepare it for consumption — whether information is in an Oracle database, MongoDB, Hadoop, or in a cloud platform such as Workday.

Growth. Informatica wants to triple its revenue in the years ahead to $3 billion. "There are several growth opportunities for us," Abbasi said. He also said tailing master data management for industries, securing data, making business data accessible, and cloud data integration are all $1 billion potential markets.

Meanwhile, Informatica has to continue to innovate. "We've invested 17 percent of revenue in research and development every single year," Abbasi said. "That investment and focus is difficult for anyone to match."

Scaling Informatica. When we talked about the $1 billion revenue mark I noted how software companies either scale or flounder. Abbasi knows the drill because he worked at Oracle when it drove past the $1 billion revenue mark. "You have to scale the organization, groom and develop leaders who can accept more responsibility and authority," he said. "You also need a more rigorous portfolio planning process."

In addition, customers have changed, and Informatica needs to focus on their success to engender loyalty and take the company to the next level.

Hiring. To scale, Abbasi will also have to hire people who understand data — first and foremost. That approach is different than a few years ago.

"Ten years ago you could hire for Java skills and be fine. Today, the skills needed are much more varied. A person who knows cutting edge Internet of things technology may not understand cloud and social," Abbasi said. That reality is why Informatica has to hire people focused on the data no matter how the information is consumed.

Leadership. Abbasi, on the job for a decade at Informatica, said the one constant in leadership is developing a world class team. "You build the strongest team and that's your advantage," said Abbasi. That team will also have to "adapt at scale."

Informatica chief executive Sohaib Abbasi, on saving Oracle from Microsoft:

"Bill Gates didn't know how to manage [Larry] Ellison." 

He explained how he has learned how to delegate more to people closer to where the decisions need to be made, but said it was not easy. "You have to know where you add value and where you need to complement with additional talent."

Abbasi said he draws on his experience at Oracle, when chief executive Larry Ellison brought on senior executives to scale the business. Abbasi recalled how Oracle struggled scaling at first, and in 1990 delivered a disasterous financial quarter that spurred rumors that Microsoft would acquire the company.

What saved Oracle from Microsoft? "Bill Gates didn't know how to manage Ellison," Abbasi quipped.

Keeping your identity. The biggest risk to Informatica's plan to be a $3 billion business is keeping its identity as it grows. "When companies scale, they can lose sight of their identity," Abbasi noted. "Companies need to remember heritage, identity, and innovate in a way that expands the market. It's risky to go into whole new industries."

It's worth noting that analysts years ago thought that Informatica was in trouble because its specialty — extraction, transformation, and loading (ETL) — was limited. Instead, Informatica redefined ETL, and now the world sees the need for a data integrator across multiple stores. Abbasi added that the naysayers on Informatica built their theories on the false premise that everyone would adopt suites and there was no need to integrate data.

He said: "The theory was that you could buy everything from SAP and Oracle and that's all you'd need. There were two flaws. First it is not practical to give up all the legacy applications to adopt a suite. Second, you have to integrate data no matter where it lives. Now there's even more fragmentation."

"I think the world is coming around to our point of view on data."

Topics: CXO, Big Data, Enterprise Software, Innovation

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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