Amit Walia: And then to your first question on Gen AI. Look, I think this is a year where I would say more in the second half, you will see the workloads turning into first production go-lives to some extent. And I can remember, when I say production goes live for G2K kind of customers, these are nonmaterial very critical go-lives. It’s not like you can just run a data science experiment, and if it goes wrong, it goes wrong. That’s how I define our production go live. I do expect those to happen. I think a lot of work is happening right now. First is, experimenting on a small scale and trying to take it to a bigger scale than trying to make sure you can truly run it without a destination, wrong inferences. You can’t — if you’re owning it, if you’re running it customer [indiscernible] and environment, you can’t get that wrong.
So I do see some of them going into production in the second half of this year. And of course, as it goes over there, customers start thinking about the governance and other things that become very important, especially if the regulated industries, so we see that. A lot of work going on in that area with our customers. I see that in CLAIRE GPT Private Preview, the kind of stuff we are doing. I feel pretty good about it.
Operator: The next question comes from the line of Kash Rangan with Goldman Sachs.
Kash Rangan: So tailor-made. It’s so difficult to go after Zelnick and Zukin because they ask such good questions, but I’m going to try. I’m going to try. So first of all, congrats on the quarter and the finish of the year. Yes, it is tough to go after Zelnick and Zukin, but I’m going to try. So when you look at the cloud business, I mean you’re on track to finishing up close to $1 billion run rate somewhere in calendar ’24 or early ’25. And you got there in a relatively short period of time or is the on-prem, I fondly remember the founding of Informatica in 1994, and I was sitting with the dais. So congratulations on your 30th anniversary. It took 30 years to get the on-prem business to a certain scale, right? When you look at the cloud, if the cloud does extend the growth path to a greater level of durability and longer level of growth versus the on-premise took 30 years to get here.
What are the things that will enable the cloud journey to be a longer journey. And if you could offer some proof points, Amit and Mike on why you are, if you are underrepresented with respect to your cloud wallet share as you look in this journey, that would be great. And then finally, not to be out then. As you look at the existential risks of this category, not at the company, how do you think about framing the risk posed by the cloud data warehousing companies that have their own native ETL tools are in a world that promises maybe to be no ETL or ETL-like. How does Informatica thrive on that? Thank you so much once again and congratulations.
Amit Walia: Thanks, Kash. I think I’ll comment on the first one first. I couldn’t agree more. I said that at the Investor Day that the pace of the innovation to get us to $1 billion of subscription and now getting towards the $1 billion of cloud, it has happened in less than 1/3 of the time frame that the company took to reach $1 billion of license and so couldn’t agree more that we are definitely firing on all cylinders and the platform strategy is working. To your second question, I mean, I’ll break it into a couple of parts. First of all, Kash, I will respectfully remind everybody that Informatica is not an ETL-only company. I think this goes back re-into the question that I think we’ll have to maybe continue to remind, ETL is a very small component of what we do.
We have 7 product categories, data integration and data engineering, data quality, app integration and API management, data catalog, MDM apps, data governance, data marketplace. In data integration sits ETL, ELT, mass ingestion, I can go on and on and on. Actually, ETL is a very, very small component of the world. And in fact, when we gave out a free services, we actually genuinely believe that the small companies who came out with just ingestion only capabilities will basically run out of business. We are not an ETL company anymore. We do larger data management, in which no data warehouse. By the way, all these data warehouse, you can have 10 connectors, which creates a simple ETL. But when you think of the metadata, when you think of quality, when you think of governance, when you think of the broader elastic, when you think of ELT at scale pushed down performance, when you talk about SAP, when you talk about those complex, it’s a whole different world.
We just don’t see that that part is where Informatica’s size and grows. ETL, it’s immaterial to Informatica’s growth today and has zero bearing on how we will grow tomorrow. We have moved beyond that in a significant way. So I think I’ll just kind of almost echo that for the larger group and you, that’s not what I worry about where Informatica is and where Informatica is going.
Mike McLaughlin: And I’ll go back to the first part of your question where you’re talking a little bit about wallet share and so forth. The data management market is still very fragmented. And if you remember back to Investor Day, we showed the IDC TAM growing at 27% through 2027. And getting to north of [$60 million] [ph] and our cloud right now on a revenue basis is only $500 million as we disclosed for the first time in our release today. So we don’t have a big share of that TAM, although we are the leading provider. But we think that because we have the best data management products delivered on the industry’s only platform that serves multivendor, multicloud and hybrid workloads that we at least will maintain our market share, and we think we’re going to grow it.
And the buildup to the 35% growth that we think we’re going to deliver in ’24 between net new expansion, net new customers and expansion of existing workloads and migrations. It’s just not heroic based on what the TAM is growing by and our share of that TAM.
Operator: The next question comes from the line of Patrick Colville with Scotiabank.
Patrick Colville: I want to go back to generative AI. I mean you touched on it in the prepared remarks, and you touched on it in the Q&A. But can you just give us, I guess, the 1-0-1 like how does Informatica benefit from generative AI. When do you see this Gen AI benefit hitting the financial model?
Amit Walia: Yes. So I think two-part question. So I think, think about it this way, what is Gen AI. First of all, in the Gen AI world, as we all know, right now, the models are being put out there and everyone wants to train the models to do something of value, very simplistic put. And I think in that world, there is no value in the model without good data going in and good influence coming out, a little bit like you all live in the world of Excel. And Excel by itself doesn’t deliver any value when you basically create a good model and put good data in that Excel model in this conversation, you get data from us, puts out a big inference. The biggest opportunity in front of us, and we are seeing that is that customers have relied, in fact, data management or data is becoming a business process in itself, they need to make sure that they have good data, holistic data, clean data.
They understand the context of that data, which is lineage. They understand the governance of that data. We can make sure that in that context, democratization happens in being much more governed way. All of those things are basically what we do. and we see that is happening as we speak. The new stack, everybody don’t want to get that in order as the experiments on the side become more and more and more operational. And there’s a lot of other stuff that’s happening using the Internet data that’s different. When you have to use your company data to do all that stuff you talked about, and that’s where we are. In fact, the CLAIRE GPT Preview that’s going on, we see some of the great things, customers data discovery, classifying data, automating data quality.
We see classifications improve by 60%. Quality of data improving by 100x, think of that is what is automation and what CLAIRE is being able to do. That’s where we come into play. And the other one is that it’s a complex part of the data stack [indiscernible] things customers don’t want to have 20, 30 bespoke tools doing it because then you can’t figure out what’s happening where basically consolidating it on a platform, which again, gives them consumption base price makes it a time easier. So that’s where we are seeing a lot of value. And I think this year, we are going to see the early tailwinds of that. It’s kind of baked into our model. And I think I do see that basically in the next few years, digital transformation will become nothing else, but Gen AI driven digital transformation.
Patrick Colville: Yes, exciting times. And I guess the CLAIRE AI GPT, the kind of, the Informatica Copilot’s. Is that Informatica’s charges for? Or will that be kind of part of the core product offering?
Amit Walia: Part of the core product offering, it’s IPO consumption. So we want. They are basically driving more IPO consumption, no separate SKUs out there, basically, it is going to be part and part and parcel of what the individual products are and what customers are going to do with them, and they will basically draw down IPU usage and an increase IPU due consumption.
Operator: [Operator Instructions] Our next question comes from the line of Koji Ikeda with Bank of America.
Koji Ikeda: When I think about Informatica and taking it back to the IPO and the results and the execution since then. The IPO, it really seems like it’s just been business as usual, good execution as usual, but maybe not platform as usual. And what I mean by that is the platform, the offering IDMC has definitely gotten bigger and better since the IPO. A lot of new announcements over the past year, CLAIRE GPT, IPU pricing model, I mean, a lot has been announced. So I guess the question here is what are you most excited for within all the announcements over the past years as growth drivers over the medium term?
Amit Walia: What a tough question. You’re asking you want me to pick my most favorite hidden all this stuff. I’ll attempt. But look, I go back, I’d put it in 3 things. It’s not one because it’s always a power of things that come together. One is the innovation strategy. We not only bet on the platform because we knew that, as Mike said, it’s a very fragmented market. While there are hundreds of bespoke tools running around. And we knew that, by the way, not all of number best-of-breed also as much as they said that. So we had best-of-breed products on one platform. So the consolidation, derisking of customer strategy to basically go with one vendor with the best products and the only platform has worked, and that allowing customers to manage their hybrid multi-vendor that landscape, which is true for every enterprise.
