After a six-year stint in Informatica’s leadership team, Amit Walia was named as the company’s CEO in January. Ahead of today’s CIO roundtable discussion on data strategies, hosted by NS Tech, Informatica and Deloitte, we caught up with Walia to discuss digital transformation, his plans for the business, and the evolving role of the chief data officer (CDO). This is an edited version of that conversation.
Congratulations on your appointment. What is your vision for Informatica?
It is an honour to be leading a company that is a leader in its space already. So, to give a little context: we are the leader in all of the markets we play in. We call it enterprise cloud data management and we’ve been a leader, not just in terms of vision and innovation, but also in terms of customer loyalty, customer retention and market share.
I stepped into this role six months ago, and I think it is safe to say that the challenge of the coronavirus pandemic has been something that no one expected to have such a huge impact on the world and its ways of working. Data, digital transformation, cloud modernisation, and data governance and privacy are all vectors of growth that are continuing to drive Informatica’s opportunity. As we continue to navigate these unprecedented times, our goal remains the same – we strive to be the best partner that we can be to our customers and employees at all times, and we have already implemented strategic changes to ensure that we are on track to remain a market leader, and continue to grow.
How long will it take to double the size of the business?
To give you a sense of where we started, Informatica is a 27+ year-old company. About five years ago, we went private and went through a tremendous business model transformation. We were a license driven company and, as we privatized, we pivoted to a subscription-based model, recurring revenue, and to all things cloud. That’s gone really well and opened up a lot of new markets for us. Whether it’s around the MDM 360 solutions, data cataloguing, cloud modernisation, analytics in the cloud or data governance and privacy, we’ve opened those new markets.
We ended last year at $1bn of annual recurring revenue. Within that, the subscription revenue has grown handsomely at 55 per cent compound annual growth rate for the last couple of years. Our cloud business is today running 10 trillion transactions a month, so those transformations have gone very well for us. However, there is no hiding from the fact that Covid-19 is having an impact on the global economy, meaning that it is hard for any business to predict a categoric level of business growth at these times. That said, I would like to emphasise that we remain committed to supporting our employees, customers, partners and communities, and putting everyone’s health and safety first.
Will you go public again after the next two years?
All options are open for us. We were a public company for the longest time, so needless to say, we’ve run our company as if we were public. I always say: focus on the customer, focus on innovation, and if you’re growing, all options are equally available for us to make decisions.
Informatica has recently rolled out a suite of new and updated products, embraced a subscription-only model and continued to deepen its partnerships with three of the cloud giants (AWS, GCP and MS Azure) – what has motivated these moves?
If you step back and look at Informatica’s history, we’ve always shaped our markets. We saw that the market was going towards all things cloud and we had invested in the cloud early, but we wanted to accelerate. That requires a lot of investment in engineering, R&D and forward-looking investment.
Second is, we clearly saw the world going towards subscription and we wanted to be very aggressive about it so we felt it was easier to do it as a private company. Our investors have been extremely growth and transformation-oriented, so we saw those vectors coming, and as a company we’ve always been ahead of the curve. We said we’re going to drive it even faster, and hence, we made those transformations happen. We never looked at any of those things as a defensive opportunity. We look at them as opportunities for us to go after and define the markets.
How do you see the role of the CDO becoming more mainstream, and how do you see the charter and scope of the CDO role develop going forward?
One of the biggest changes we’ve seen in the last couple of years is that data has become a boardroom topic. You look at any of these transformation initiatives, whether you’re transforming and going to the cloud, doing customer experience transformations, privacy transformations, it’s all about the data. At the board-level, everyone is having that conversation.
The rise of the CDO started with regulatory compliance and the 2008 crisis, but what we see is it has fundamentally transformed. Yes, those are still important things to do, especially in the regulatory-compliant industries, such as financial services and healthcare, but we see that the role is becoming extremely strategic and critical. It’s transforming not just from being a compliance-driven role but a much more business and value creation-focused role.
Like with the 2008 crisis, the current state of the world is likely to have an impact on the role of the CDO. Currently, more people are working remotely, and this is causing organisational data to be more widely distributed. This means that the role of the CDO has never been more important in creating value for businesses by enabling them to innovate, remain agile and ensure that this distributed data, is protected. As expected, regulatory compliance will become, over a period of time, secondary even though it started from that vantage point. I see that as a very strategic role, a very critical role for every enterprise to have. The analogy I can give you is that almost 15 years ago, we saw the rise of the chief information security officer (CISO). It used to be part of the CIO organisation and if you look at it today, it’s a mandatory must have for every organisation. Now we’re seeing a similar transition with the CDO, but it’s happening at a much, much faster pace.
How has the introduction of regulations such as The General Data Protection Regulation (GDPR) affected the data management sector so far and what further impact are they likely to have?
GDPR led the way, but many countries around the world have their own data protection laws, whether it’s Singapore, India or Australia. There is one element of it being driven by a regulatory compliance point of view, but we’re also seeing companies saying “hey look, even if I’m not driven by compliance, it’s important for me to be in front of my customers and saying I am watching out for you.” That has brand implications for every company.
We see everybody move towards governance and privacy as mandatory things to do, almost as a design principle. So in that context, those are creating huge amount of opportunities for the CDO. They are the primary overseers of what does it mean, how do we go about it, how do we manage it, how do we do it, how do we operationalise it? So we’re definitely seeing those vectors creating a huge amount of tailwind for all things data management.
What challenges are customers facing as they manage their move to cloud and with cloud data management?
Our customers are in the middle of some very tectonic shifts in terms of what they’re grappling with and what transformation they’re going through. The cloud transformation hasn’t happened yet; it’s still in very early innings. If I take a soccer analogy, I’d say maybe we have ended the first quarter of a soccer game. We haven’t yet got to halftime. However, it does seem that the impact of Covid-19 has started to accelerate the process.
Cloud transformation is huge. It’s not just ground to cloud, it’s multi-cloud – and it obviously has huge data implications. Customers are still grappling with it. It’s happened at the application layer, but at the platform layer and infrastructure layer, it’s still in its early innings. We see a huge continued focus on digital transformation. That’s definitely a vector that’s here to stay. I don’t see digital transformation slowing down at all.
Tied to that is a third trend we see that customers are really investing deep in, which is transforming their own customer experiences. How do I engage with customers especially when more are online than ever before? You classically look at the retailers; they are at the cutting-edge of it but a lot of financial services companies are also looking at that.
Business models are changing; if you look at the insurance sector, which was traditionally led through a broker or a wholesaler, today companies want to understand their end customers better or become a direct route to consumer if they want to. Those are all very fundamental customer experience transformation initiatives. So we see that happening across the board.
Last but not least, companies are still grappling with how do you manage data governance and privacy? It’s not just a regulatory compliance issue. It’s just as much a brand and reputation issue and a customer retention issue that you want to manage your customers’ privacy and govern their data. We see these four as big topics customers are invested in.
What’s the most common mistake you see customers make when it comes to implementing their data management strategies and how can others learn from it?
I think if I had to generalise I’d say it begins with not having very well-defined business outcomes. Technology and business have to go hand in hand. If you can define what the business wants and business outcomes will define success, that to me is mandatory. Otherwise technology is for technology’s sake.
Number two is trying to do too much too soon. Phase it. Try to define success and have short-term wins to define a long-term transformation. Otherwise transformation journeys are long. Sometimes it can tire people. Sometimes we don’t know what the outcome is, so we want to create wins along the way.
The third one would be that a lot of these things are riding on the basis of new technology. Every company’s becoming a tech company. Getting the right skillsets of both technical skillsets and skillsets of people who can marry business and tech is hard. Skillsets remain the challenge. We really try to help our customers overcome that barrier considerably. Those would be the three I’d begin with.
What’s next for Informatica? What are the primary data management challenges faced by your customers that you’re focused on with investment in R&D?
Despite the landscape constantly changing, we have seen that demand for all things data management have a massive tailwind behind it.
The four vectors for us are obviously all things cloud modernisation, digital transformation, and data governance and privacy. Basically, we are mainly focused on helping our customers achieve those four goals. Our product lines tied to those goals are under rapid growth, whether it is our data cataloguing solution, our data governance and privacy solution, our 360 solutions for MDM or our cloud platform; each one of them are scaling and growing very rapidly.
We are focused on driving organic and inorganic growth in those categories and helping our customers be successful. Underlying all of it is our big investment in creating value for our customers so we have a big emphasis on customer loyalty and customer success.
How has the coronavirus crisis impacted Informatica’s business and what steps is it taking to bolster its client relationships during these challenging times?
The coronavirus crisis has been an unprecedented and challenging situation for everyone, though, it has really driven home the importance of staying true to our values: We DATA – Do Good, Act as One Team, Think Customer-First, and Aspire for the Future.
It goes without saying that our employees and our customers sit at the heart of our business, so for me, it’s been important to ensure that they are at the forefront of every decision we have made when planning to ensure business continuity.
For our employees, we have made sure that each and every single person is equipped to work remotely, for as long as they need to with our rich collaboration tools and follow-the-sun staffing model. This model supports us in providing full-service support to all of our clients to deliver an uninterrupted service, whilst putting their welfare and interests first. More crucially, we understand that no one person is the same. Life is crazy for some people right now, and it’s important for us to acknowledge that some people might need to work more flexibly in order to accommodate home schooling, caring for aging parents, etc.
For our customers, as a new CEO, I was quickly faced with critical decisions around business continuity plans for ensuring that Informatica’s customers – which handle critical activities like vaccine research, drug supply chain management, and the integration of provider information across state lines – were supported. For example, the company made the decision to lift capacity limits on its licenses for healthcare organizations so they could easily scale up activities like empty bed reporting without worrying about cost.
And the world begins to re-open and companies make tough decisions – such as when to bring employees back to work – data quality, accessibility and transparency have never been more critical. That’s why Informatica and other members of the Data Coalition recently signed an open letter to Congress calling for action that will make valid, reliable data available through a trusted and robust data infrastructure.
There’s no one solution fits all policy to the impact that Covid-19 has had on business operations. Though, I can say with absolute certainty, that we’ve worked hard to communicate our plans, processes and updates with both staff and customers, regularly. Communication, support and collaboration are all going to be important in ensuring business continuity, whilst putting people first.