Salesforce is in advanced talks to acquire data-management software provider Informatica. If the deal comes to fruition, it will join Salesforce’s previous major acquisitions, including the $6.5 billion purchase of MuleSoft in 2018, the acquisition of Tableau for $15.7 billion in 2019, and the acquisition of Slack for $27 billion in 2021.
According to reports, Salesforce will be paying $11 billion for Informatica.
Based in San Francisco, cloud-based software company Salesforce is best known for its customer relationship management (CRM) platform. However, the company is now aiming to expand beyond CRM and become a comprehensive data journey platform, covering all aspects of data management and utilisation.
Founded in 1993, with a market cap exceeding $11 billion, Informatica is recognised for its ability to integrate data from diverse sources, including databases, cloud storage, applications, and social media platforms.
In 2015, the company was acquired by a consortium that included Permira and CPPIB, for approximately $5.3 billion before going public again in 2021.
Salesforce’s Generative AI Prowess
Salesforce recently announced the public beta availability of Einstein Copilot, a new customisable, conversational, and generative AI assistant for CRM. It can answer questions, summarize content, create fresh content, interpret complex conversations, and dynamically automate tasks on behalf of the users.
Last year, Informatica introduced its generative AI tool Claire GPT. It allows enterprise users to consume, process, manage and analyze data through plain natural language prompts. Claire GPT can automate routine data management tasks like data classification, lineage discovery, and data quality checks.
Nowadays, to use generative AI tools, data availability is important. “It’s clear that enterprises are now focusing attention on data-centric AI. Big data will continue to be the foundation, but contextualized data is king,” wrote James Wu, Partner at M12 – Microsoft’s Venture Fund on LinkedIn.
Many data-driven companies are currently experimenting with generative AI. Last year, Databricks acquired MosaicML, and recently, it released its own open-source model called DBRX.
SnowFlake recently partnered with Mistral AI and released Snowflake Copilot. This tool lets users ask data questions in plain English, and it generates the SQL queries needed, making SQL writing faster and data analysis simpler.
Most recently, the company open-sourced the Snowflake Arctic, embedding a family of models under an Apache 2.0 license.
Informatica Brings Data to Where it Matters
Salesforce’s possible acquisition of Informatica is targeted at greatly enhancing its data capabilities, especially in fields like data integration, quality assurance, and customer insights. “Salesforce potentially acquiring Informatica seems like a push to compete more with Snowflake,” wrote Astasia Myers, partner at Felicis.
“Informatica can help CRM customers get their data ingested, cleaned, and transformed so businesses can analyze their data better. It complements Tableau and could be particularly helpful for Salesforce’s AI cloud workloads, she added.
Informatica’s data integration products, such as Informatica PowerCenter, enable organisations to integrate data from disparate sources, ensuring that it is accurate and available for use across the enterprise.
Salesforce recently introduced Einstein 1 platform which unifies company’s data, AI, CRM, development, and security into a single, comprehensive platform. Moreover, it provides organisations in every industry access to the best of Salesforce technology, including CRM, Einstein Copilot, Data Cloud, Slack, and Tableau in a single offering.
Informatica’s expertise in data integration can significantly improve the quality and accessibility of data used by Einstein 1.
Last year, Salesforce launched Data Cloud, which eliminates data silos, creating a single platform to access and leverage all your enterprise data. It also allows enterprises to bring data into Salesforce with a library of connectors and leverage zero-copy integrations from Snowflake, Redshift, BigQuery, and Databricks.
Informatica’s data cleansing and transformation tools can ensure the data integrated into the Data Cloud is accurate, consistent, and usable for analysis. Moreover, Informatica can play the role as an ETL for Databricks, Snowflake, etc.
Enables Tableau and MuleSoft
Informatica adds to Salesforce’s acquisition of MuleSoft and Tableau. Salesforce’s MuleSoft enables businesses to connect various applications, devices, and data within their cloud computing environment using APIs.
A user on X wrote that if Informatica’s acquisition news is true, “then MuleSoft could dominate the world for a decade”.
MuleSoft is known for its expertise in APIs and data transfers, while Informatica focuses primarily on ETL processes and ensuring data quality within data warehouses and lakes.
According to Bloomberg Intelligence’s Sunil Rajgopal, Informatica competes directly with MuleSoft, which is Salesforce’s third-largest acquisition to date. Rajgopal said that this acquisition may lead to increased consolidation within the software-as-a-service sector and could draw regulatory attention.
Similarly by acquiring Tableau, Salesforce aimed to bolster its analytics and data visualisation capabilities by integrating Tableau’s leading platform.
Tableau is renowned for its user interface and data visualisation tools, as well as its ability to pull data from a wide array of disparate sources, including on-premises databases.
Simply put, if the deal goes through, Salesforce will be poised to elevate AI innovations to the next level, bringing data to where it matters most, alongside giving them an edge over their competitors, including Oracle, SAP, Zoho, ZenDesk and others.
