IBM Initiates Deeper Healthcare Focus by Acquiring MDM from Initiate Systems
February 05, 2010

Well expected and finally announced is the sales of Initiate Systems to IBM that should close in coming months after regulatory approval. Initiate was a master data management (MDM) technology solution provider with their products called Initiate Master Data Service, data discovery technology with Initiate Inspector. They also have modules like address standardization and supporting third party interfaces to Pitney Bowes Business Insight and data quality capabilities with connectors to third party technology like Trillium. Initiate also had leveraged their SDK efforts into SOA architecture to make it simpler to interface to other technologies easily. Initiate had accumulated almost 200 customers across industries but a concentration within healthcare and government industries since 1995.

IBM already has indicated their focus on using Initiate as a lever into healthcare and government industries and clearly will need to rationalize their technology portfolio as it has significant overlap to the IBM InfoSphere MDM server technology and IBM InfoSphere QualityStage. Initiate Systems had recently release their version 9 product that brought their advancements with the Enterprise SOA Toolkit, document sharing through their enterprise master person index capabilities and Accuracy Workbook to have better metrics on the quality of data. IBM is quite envious of the progress Initiate made through the alignment of their technology into industry solutions. Initiate MDM approach in these industries was through a registry and rules based approach had distinguished their approach compared to IBM MDM approach. In addition this acquisition provides IBM Global Services more technology to help implement and deploy into business processes and vertical industry efforts.

Initiate Systems has learned a lot about the necessary aspects in managing healthcare records and patient specific information. This is more than managing master data but the level of interactions of individuals and locations across systems that must be uniform and ensure its quality and privacy in a patient record using Initiate Patient that leverages the portfolio of horizontal products including the core Initiate Master Data Service. Their focus also includes a similar approach with healthcare provider with their technology called Initiate Provider. They have also has jumped on the government bandwagon with their alignment to the American Recovery and Reinvestment Act (ARRA) by using their technology to further advance the electronic health records and health information exchange (HIE) through Initiate Provider Management. This focus had provided Initiate Systems well over half of their business focus from delivery networks, payers, providers to these exchanges.

But Initiate also made significant progress to helping governmental efforts through managing entity level data to help coordinate across agencies from citizen to criminal level data. Initiate Entity Resolution helps address these challenges of rationalizing data to understand issues.  This provided Initiate unique position with customers at state and provincial level to government level like Department of Veterans Affairs.

IBM had advanced their MDM capabilities through specific acquisitions that were layered on top of their data integration called IBM InfoSphere DataStage and data quality technology called InfoSphere QualityStage as part of the unified information technology called IBM InfoSphere Information Server. IBM has been readily improving their MDM technology through further integration into their portfolio of technology but by also having new support of content and analytics. This announcement follows the announcement by Informatica to acquire MDM supplier Siperian that advances their efforts (See: “Informatica is a New Master in MDM with Siperian Acquisition”) and Oracle who recently acquired Silver Creek Systems to advance their MDM efforts (See: “Oracle Finds Silver in the Creek of Information Management“). Stibo Systems has been steadily advancing their efforts in North America over the last several years (See: “The New Stibo Systems: Innovating MDM for Business and IT”) . Now with a shorter list of MDM choices in the industry those that are just stepping into utilization of this technology within specific and across multi-domains of content and data to advance information management.

All of this competition and market transition has helped accelerate the technology evolution and focus for the industry to understand the importance of MDM and supporting data governance. I found in the recent Ventana Research benchmark research in data governance an acceleration to the use of information technologies to automate and improve the consistency and quality of data within and across organizations. Organizations using Initiate Systems outside of healthcare and government should readily know that IBM has an invested priority to keep you happy. But be pragmatic and understand that IBM MDM technology for your industry is in the existing IBM InfoSphere product line which will need to be part of your examination on how you determine where to advance your deployments. Despite this the inertia of MDM as part of data governance will continue to advance driving demand for technologies across industries from IBM and others. The changes through merger and acquisitions in the technology vendor landscape to help organizations operate in a more efficient manner are just part of a maturing industry that will help improve our competencies in the management of information. This acquisition by IBM is a smart one that they will find can help provide them new opportunities to advance an industry they had begun consolidation of more over the last five years.

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Mark Smith – CEO & EVP Research


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