Information overload: why companies need to manage their data

If the worst side-effect of the industrial revolution was pollution, then what is the biggest repercussion from an era of digital transformation?

It is the widespread collection of data without any real thought as to how it might be stored and used, according to Anil Chakravarthy, chief executive of Informatica, a company that last week announced 150 new jobs in Ireland.

"In the early days of the industrial revolution, nobody cared that factories were causing pollution, but then came regulations to deal with the issue because ultimately it became something that society had to confront," he said, speaking to The Irish Times on a visit to Dublin to open the company's new European headquarters.

“Similarly, we are in the early days of this new revolution around data and so don’t quite understand all the side-effects from collecting so much of it. Increasingly, however, we have realised there are issues associated with it,” he adds.

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Data is seen as having replaced oil as the world's most valuable resource, as the ever-rising share price of tech giants such as Google and Facebook shows. But just as oil spills have wreaked havoc on our rivers and oceans, so data leakages have also led to difficulties.

Moreover, in addition to issues around safeguarding information, many organisations have been so focused on gathering data without mining it or analysing it well, that it has come to seem more like a burden than an opportunity.

Chakravarthy isn’t the first to note the rise of what has become known as “information pollution”, whereby such vast volumes of data are collected that it becomes hard to manage. But given that the company he leads is one of the biggest players in enterprise cloud data management, he is more qualified than most to talk about how we got into this mess and how we might get out of it.

“The problem for most companies is that in the past data was always an afterthought. You built a system or application and there was data associated with it. Then you said, ‘I’ll figure out what I want to do with that later on.’ That’s the reason why difficulties started around data privacy, because no one had thought much about the consequences of holding it,” he says.

‘Free-for-all’

"A lot of what you see, even with Facebook and the problems it has with fake news and so on, is simply because there has been a free-for-all with data. I think we're increasingly realising, though, that, as with other types of pollution, it is better to clean up the spills at source, which is why new regulations such as the General Data Protection Regulation are coming into force," he says.

This is where Informatica comes in. It provides a platform that give companies a comprehensive 360-degree view of all the data they have stored across various systems both on-site and in the cloud, so they can better integrate, analyse and protect it.

The company describes itself as the "Switzerland of data" because its products work across multiple platforms.

“We’re focused on helping customers understand that data has to have its own architecture which can manage different capabilities,” Chakravarthy says.

Founded in California in 1993, the company went public on the Nasdaq six years later, but was taken private again in 2015 after being acquired by Permira and the Canada Pension Plan Investment Board. Microsoft and Salesforce Ventures also came on board as investors following that $5.3 billion (€4.3 billion) deal.

It now employs more than 3,500 people globally, including about 100 in Ireland, and has annual revenues of more than $1 billion (€810 million). In recent years it has focused on introducing newer technologies such as artificial intelligence (AI) to data management and compliance.

Outside of last week’s jobs announcement, Informatica is probably best known in Ireland as the company that snapped up the Irish-founded software firm Similarity Systems for $55 million (€44.6 million) back in early 2006.

The acquisition meant that its growth here has been the opposite to that of most multinationals in that it started off with employees working in roles in R&D and engineering and then added so-called “softer” functions such as sales, marketing and tech support in later years.

‘Follow-on investment’

"You buy a company like Similarity, which has great technology, but then you have to invest in everything that surrounds it. There's no point just doing an acquisition if you don't do the follow-on investment," says Chakravarthy, who previously worked in a number of lead roles at Symantec before joining Informatica in 2013.

A number of Similarity employees who transferred over to Informatica are still with the company. They have been joined by new staff with the company as it doubled its headcount to 100 recently. It now has plans to increase that to 250 within the next three to five years.

Just last week the company officially became the first occupant of 1 Windmill Lane, a new development on the site of U2's former studio. It also announced a number of local senior appointments including naming Keith Lyons, its vice-president for research and development (R&D), as its new country managing director for Ireland.

Chakravarthy is aware of many of the infrastructural issues causing concern here, including the housing crisis. But he doesn’t expect it to impact on recruitment and he sees it as a consequence of a thriving economy.

“Bangalore, my home city, has the same issues. When I was a kid it was great. There was no traffic but there were no jobs either,” he says.

Chakravarthy believes that with almost every company undergoing some kind of digital transformation, there are plenty of opportunities for Informatica given that data is central to the revolution.

The move towards stronger regulation of data, as seen with the General Data Protection Regulation (GDPR), which comes into effect in May, is also a driver for growth and one which the company has responded to with new tools to aid compliance.

Positive step

Not surprisingly, Chakravarthy sees the GDPR as largely a positive step, not just for companies such as his, but for society as a whole.

“It was the right step at the right time to just force thinking around what is data and what value does it hold,” he says.

“I also think it will ultimately have a lot of other side-effects as it forces companies to put discipline around data,” Chakravarthy added.

Informatica has also undergone its own digital transformation of late. As with many older tech giants like Microsoft, it has been forced to shift from being predominantly a software company to a cloud-based one.

“There have been a lot of challenges for us in terms of growth and also the difference capabilities we have had to learn. Transformation is always difficult, particularly at the beginning, and it is one of the reasons why we went private again and brought in a new management team. The process is not complete but 2017 was a very successful year for us,” says Chakravarthy.

“I believe there is a lot of organic growth for Informatica but we are also constantly on the lookout for companies we can bring in for different parts of our portfolio,” he adds.

It’s also no secret that Chakravarthy is eying a return to the markets with speculation that Informatica could float either later this year or next.

Chakravarthy won’t be drawn exactly on when this might happen but he’s clear as to why he thinks it is the right move.

“We want to be a public company again, which is why we’ve been making lots of changes internally,” he says.

“There are a couple of reasons for choosing to list again. Firstly, it will allow us to attract financing that will help us grow more. But it is also good from an employee perspective as those who have stock in the company will be able to convert their paper wealth into real wealth.”