This past Monday, Informatica announced that it is buying Itemfield for $55 M. Itemfield offers data transformation products for unstructured and semi-structured data, which complements Informatica’s current offerings.
Traditional business intelligence vendors have not been tapping into the world of unstructured data. In fact, managing unstructured data has become its own industry (called knowledge management), which has been evolving independent of the BI space. I have always thought the two would eventually merge together, but the architectures of existing BI products made this a difficult, if not impossible, task.
This transaction makes sense for Informatica. The price tag is about 5.5% of its current market cap. So, if Informatica is indeed able to expand into the knowledge management space through this acquisition, this will prove to be a high-return transaction. At the same time, if Informatica is not able to successfully enter into the knowledge management space, at least it hasn’t banked its entire future on this acquisition. All in all, I thought it is a shrewd move by Informatica.