Despite its announcement in May last year that it would be merging with data integration vendor ReferenceDataFactory (RDF), data management consultancy LakeFront Data Consulting has indicated that both firms will instead remain as separate entities. Dale Richards, who was previously president and CEO of the merged company and is now taking a back seat, explains that the strategic decision to demerge was taken to avoid further internal and external confusion.
The merger was originally driven by the fact that both companies had worked together on a number of different deals where there was significant cross pollination between them, says Richards.
However, this decision has been reconsidered in the cold light of day. “Our success drove a merger agreement in principle but we have since concluded that the two companies are more independent and unique than we originally thought. LakeFrontData Consulting is a pure consulting firm and RDF is a pure data management integration tools vendor. The proposed merger caused confusion externally for our clients and we saw that strategically it didn’t make sense to combine the businesses,” he explains.
“We operated as one business from May until late last year but we now we want focus on the consulting business as a trusted advisory firm and focus on software as distinct business model. Both businesses have matured and achieved their own levels of success and it is better to focus strategies. We have been successful crystallising the business plan for software we are building and we have built up a community around the consulting business so that they stand on their own as separate businesses,” claims Richards.
The two firms will therefore be operated as independent entities with their own focused strategies and dedicated management teams. However, RDF and LakeFrontData Consulting will continue to non-exclusively partner on engagements where appropriate, says Richards.
This essentially means that RDF, LakeFrontData Consulting and LakeFrontData Jobs are now independent entities as part of the LakeFrontData Ventures (LDV) family of businesses. Marc Odho is heading up LakeFrontData Consulting, Gerry Marsh is the managing partner in of RDF and the board is currently seeking a managing director for LakeFrontData Jobs.
“My ongoing involvement will be as a board member assisting in strategy of each company and as a trusted advisor to management. I helped launch these businesses and given their success, I am stepping away from the day to day with the management teams in place,” adds Richards.
He indicates that he will also be involved in a number of other as yet unidentified projects: “Beyond the LakeFront companies, I will continue to be personally involved in various senior advisory assignments and am also helping launch other business within the LDV portfolio.”
In terms of the market environment in general, Richards believes risk and regulation have become key drivers for investment in data management. However, large scale enterprise data management projects are experiencing a slow down as firms take a step back for this approach, he adds. “These firms are looking for solutions to specific problems within individual silos or functions – people are picking and choosing the functions that they will tackle. It has become more surgical and specific, as people are solving targeted issues rather than tackling the whole thing at once. Software as a service (SaaS) and ASP models will become more popular to solve specific problems,” he elaborates.
“We are starting to see smaller, nimble niche players addressing these issues as there are fewer large scale deals for them to go after. The marketplace is now shifting more to departmental focus and specific functional results, providing specific measurable solutions for specific problems and opportunities,” Richards continues. “The bigger integration firms are quickly adapting strategies targeted at these areas and some of the traditional vendors are moving to target these problems.”
Despite the concerns of some in the market about the long term viability of the smaller players in the vendor space, Richards does not believe this will be a significant issue. “In this marketplace, everyone is deemed as risky – it is not just a concern for smaller players – even the larger players may be seen as having potential stability issues. The old rules just don’t apply any more,” he says.
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