Editorial
Leading data management vendors are rapidly expanding — both organically and through acquisitions — to build what Matt Bornstein, Martin Casado and Jennifer Li of Andreessen Horowitz dubbed “the modern data stack.”
Databricks recently announced its acquisition of BladeBridge Technology, adding to a series of purchases, including Tabular. In total, Databricks has made eleven acquisitions worth billions. Snowflake has also acquired eleven companies, averaging $800 million per deal, including its purchase of TruEra. Meanwhile, Salesforce has joined the consolidation trend, acquiring the Own Company for $1.9 billion.
The pattern is clear: major players are investing heavily to consolidate the market. But a key question remains — does the wave of acquisitions create real value for customers seeking to deliver a seamless data fabric more quickly?
It's Time to Industrialize Data
The mandate for CMOs and CDOs is clear: to drive better business outcomes and improve customer experience, they must industrialize their data. The authors of “Data is Everybody’s Business” emphasize the goal should be to “deliver more accurate, timely, and integrated data to users who previously lacked access or spent hours stitching together spreadsheets.”
Research from MIT-CISR underscores the sense of urgency, showing that organizations that industrialize data and optimize customer experience achieve 17.3% higher revenue growth and 14% higher net margins than the industry average.
This should be welcome news for CMOs and data-driven executives building the business case for an appropriate investment in data technologies. However, is the M&A spree building a unified "ERP of data management,” like how ERP systems consolidated finance, manufacturing, inventory and customer data into a cohesive platform? Or is it simply creating complexity, forcing enterprises to navigate a tangled web of integrated-but-not-quite-seamless tools?
To answer this question, let us examine what our research at Dresner Advisory Services says about the advantages and disadvantages of hiring a single vendor versus choosing best of breed.
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The Advantages of a Single Vendor
Acquisitions in data management promise many things including ease of deployment, centralized platform management, enhanced security and cost reduction. I would add one throat to choke. However, these advantages are theoretical unless the acquired technologies are rebuilt on a common platform. Without this foundation, integration remains a long and costly process. To be clear, creating a common platform can often involve years to fully rework while further acquisitions remain a siren call.
The reality is acquisitions often introduce more complexity than they resolve. Instead of creating a unified solution, they can result in a collage of second-tier technologies that were not designed to work together.
Security is a prime example of this challenge. While legacy on-premises systems typically had well-established security frameworks, many cloud-based solutions lack critical compliance capabilities, such as fine-grained security controls and role- or attribute-based access. This weakens data governance and can increase costs rather than reduce them with a half-baked solution.
Beyond security, the quality of acquired solutions directly impacts implementation costs. If the technologies are not state-of-the-art, they can be harder to deploy, require more customization and ultimately fail to deliver cost savings. This raises a fundamental question: Are businesses prioritizing upfront software costs, or do they value speed and minimal total implementation expense?
Finally, organizations must consider long-term flexibility. Poorly integrated acquisitions make it harder to switch to better solutions in the future, increasing real labor costs when workarounds are needed or integrations break down. If an acquired company is later absorbed or abandoned, businesses relying on its technology may find themselves stuck with an expensive, suboptimal stack. The success of any acquisition is not just about ownership, it is about whether the pieces work together and how soon they do.
The Advantages of Best of Breed
The appeal of best-of-breed solutions lies in their flexibility and state-of-the-art functionality. These solutions allow organizations to adopt the most advanced capabilities available, tailored to their specific needs. However, the challenge comes with integration — assembling multiple point solutions can complicate deployment and increase implementation time and effort.
That said, many portfolio vendors face the same struggles. While they promise an integrated suite, the reality is that many have not fully unified their offerings or are still in the process of doing so. This makes platform providers a mixed bag — some deliver seamless integration, while others offer little advantage over a collection of standalone tools. Meanwhile, best-of-breed vendors are increasingly investing in built-in, out-of-the-box integrations, closing the gap in ease of deployment.
State-of-the-art functionality can also impact full cost savings, particularly when industry-specific processes are involved. A well-designed solution that aligns with a business’ needs can reduce inefficiencies, making operations smoother and more cost-effective. Data quality is a prime example. Evaluations of this segment reveal that different vendors excel with different applications and industries. A second-class solution may simply not work for a given industry, leading to wasted investment rather than savings.
The choice is between best-of-breed and platform solutions depends upon execution. The right solution is the one that delivers bona fide business value, whether through seamless integration, cutting-edge capabilities or industry-specific fit. Organizations must carefully evaluate whether they are investing in true efficiency or simply trading one form of complexity for another.
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Which Option Is Right for Your Organization?
The rapid consolidation in data management raises an essential question: Does buying a data stack from a single vendor benefit customers, or does it simply create new challenges? While acquisitions promise ease of deployment, centralized management, security improvements and cost savings, these benefits only materialize if the acquired technologies are fully integrated. More often, organizations are left navigating a fragmented landscape of loosely connected tools, leading to higher costs and operational inefficiencies.
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For enterprises evaluating their data strategy, the key is to focus on execution rather than labels. A single-vendor solution may offer the promise of simplicity, but if integration is incomplete, the result may be a second-tier, inflexible system. Conversely, best-of-breed solutions provide access to state-of-the-art functionality but demand careful attention to integration and long-term compatibility.
Recommendations:
- Evaluate True Integration – Do not assume a portfolio vendor has seamlessly integrated its acquisitions. Assess whether the stack truly functions as a unified whole or remains a patchwork of disparate systems.
- Prioritize Industry Fit – Choose solutions that align with your industry’s specific needs, especially for critical areas like security, compliance and data quality. A generalist solution may not appropriately protect you or comply with appropriate regulations.
- Weigh Total Cost of Ownership – Consider not just software costs but also implementation time, customization efforts and long-term flexibility. A lower upfront price may lead to higher labor and operational costs down the line.
- Assess Long-Term Viability – Ensure that any chosen solution will continue to be supported and improved. Acquisitions often lead to product discontinuation, forcing costly migrations in the future.
- Demand Out-of-the-Box Integrations – Whether selecting a platform vendor or a best-of-breed solution, seek vendors that offer prebuilt, seamless integrations to reduce deployment complexity.
Businesses should not fall for the promise of integration without proof. The right data strategy is one that balances functionality, efficiency and adaptability — whether from a single vendor or a carefully curated best-of-breed approach.
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