SWOT Analysis: InterSystems and IRIS

As a matter of full disclosure, note that I worked for InterSystems Corporation in the 1990s – TWICE! Since then, I’ve tracked them on and off, as an industry analyst, consultant, competitor, and Massachusetts resident. So, I like to think I know a thing or two about InterSystems and its current data and analytics (D&A) platform IRIS.

However, there’s a lot to know, and it’s hard to keep up with their many recent innovations, as I learned at InterSystems’ recent inaugural Analyst Day (July 17, 2024). So, let me net it out for you in this article, based on an analysis of Strengths, Weaknesses, Opportunities, and Threats (SWOT). (The analysis is summarized in Figure 1.) As you’ll see, InterSystems is a modern and competitive player in D&A, so you should know about them and consider their platforms, if you work in D&A or applications development.

TECHNOLOGY & PRODUCT STRENGTHS

InterSystems keeps up with emerging technologies and best practices. A strength that has enabled the long-term success of InterSystems Corporation is its ability to maintain and improve legacy database platforms and tools while simultaneously developing new ones that keep pace with evolving marketplaces, technologies, and customer requirements.

For example, I was there when InterSystems moved from multi-user systems to client/server architecture. From multiple UNIXes to DOS, Windows, and Linux. From hierarchical database management systems (DBMSs) built around 4GL MUMPS to object and relational ones that support ANSI SQL. Just after I left in 1997, InterSystems pulled all this together in Caché (pronounced “cash-ay”), the first meaningful multi-model DBMS (named for its high-performance and distributed enterprise cache protocol (ECP)). Soon after that came InterSystems Ensemble, a messaging-based tool for integrating and accessing Caché’s multi-model data stores.

IRIS modernizes InterSystems’ data platform with cloud, open-source, and analytics. InterSystems IRIS came out in 2019 as an opportunity to consolidate Caché and Ensemble, plus add more 21st-century technologies. IRIS’ goals are summarized by its acronym: Interoperable, Reliable, Intuitive, and Scalable. However, the leading driver for IRIS was to make InterSystems platforms cloud-native. For example, to fully leverage the innovations of cloud storage, IRIS supports storage compression and a single data store (optimized for both row and columnar data storage). It also extended the older ECP to become the cloud-scale coherent cache (CSCC). To address the reality of a multi-cloud world, InterSystems IRIS is available as a public, fully managed dbPaaS on Amazon Web Services (AWS), Google Cloud Platform (GCP), Microsoft Azure, and Tencent. For even more deployment flexibility, IRIS can be deployed on premises or via Kubernetes.

Open-source-driven functionality. To make IRIS palatable to modern, cloud-based solution developers, IRIS supports open-source Python, Kafka, and Kubernetes (for containerization), plus FHIR (fast healthcare interoperability resources), while maintaining support for older data exchange standards, such as HL7 v2, X12, and EDIFACT.

DBMS as the engine for multiple forms of analytics. IRIS embeds advanced analytics in the DBMS, in the forms of time series, vector search, vector store, artificial intelligence (AI), machine learning (ML), and large language models (LLMs) with retrieval-augmented generation (RAG).

Unified development and deployment experience. Another priority for IRIS is to unify its many tools, platforms, and functions. The unification is partially done via modern data semantics, namely an extension of InterSystems’ common data plane and the release of the new GenAI-driven smart data fabric and its governance tool Data Fabric Studio. The result is a seamless, end-to-end developer experience, instead of the bucket of disconnected tools offered by some vendors.

A multi-purpose data platform for many use cases. Finally, note that the unification of IRIS, among other things, results in a multi-purpose DBMS that can enable many diverse use cases – from transactional applications to advanced analytics – plus use cases that combine both, as in augmented transactions.

Whew! I apologize for the tedious list of technical product functions, but it was necessary to make my point: InterSystems IRIS delivers a ton of modern and desirable functionality, unified in a holistic way for a wide range of customers, partners, and end-users, on a wide range of clouds and other compute platforms. The result is a strong, diverse, and up-to-date D&A offering from InterSystems Corporation.

ORGANIZATIONAL & CULTURAL STRENGTHS

In addition to the technical strengths of IRIS, InterSystems Corporation also has strengths that are organizational and cultural:

• Focused on the needs of customers and partners. InterSystems’ engineering efforts are largely driven by the demands of their customers and partners. Hence, customer churn is minimal, and efforts in R&D lead to a demonstrable return on investment (ROI).

• Making application partners successful. Many of InterSystems’ customers are software firms that develop and sell applications. Famous ones include Epic’s entire electronic health record (EHR) system (which includes the popular patient portal MyChart), M-Tech’s ERP application AMO, and UST’s SaaS-based inventory optimization solution OPTUM. The success of such partners is a high priority, because each is a lucrative channel of revenue for InterSystems.

• Famous for high customer satisfaction. At the Analyst Day, InterSystems’ Scott Gnau (head of data platforms) cited internal surveys showing that 99% of InterSystems’ customers are very happy with the concierge-like technical support they receive. The fact that many customers have been with InterSystems for over 30 years is another indication of high satisfaction.

• Employees are happy, too. According to Glassdoor.com, 82% of employees would recommend InterSystems to a friend, 90% approve of CEO Terry Ragon, and InterSystems got 4.2 out of 5 stars. InterSystems has recently appeared on lists of “great places to work” compiled by Glassdoor and Builtin.

• Strong relationships with cloud service providers (CSP). This includes Microsoft Azure, Google Cloud, and especially Amazon Web Services (AWS).

• InterSystems is a private company, and that works for everyone. InterSystems is owned by one person: its founder and CEO Phillip T. (Terry) Ragon. At the Analyst Day, InterSystems’ Jeff Fried (head of platform strategy) explained that “Terry set up InterSystems Corporation [in 1978] to be a private company and to stay that way.”

Some of my industry analyst colleagues think that staying private is a mistake. They believe InterSystems should act like a typical Silicon Valley software firm, by courting investors, going public, making money via share value, and eventually selling the company. I personally believe that InterSystems being private is a strong point for its customers, because it enables Terry Ragon and his managers to operate with fewer financial distractions and more time and resources applied to customer needs and market trends. Furthermore, customers needn’t worry about InterSystems getting acquired, which could lead to the degradation or discontinuation of products and services they need to be successful.

WEAKNESSES

As any software firm would, InterSystems Corporation suffers a few weaknesses and barriers:

• Lack of D&A market mindshare. Most IT professionals who keep up with the D&A vendor landscape are fully aware of InterSystems and its specialties. However, for the rest of the IT marketplace, InterSystems needs to run programs that raise the awareness of IRIS, which in turn might help them diversify industries and use cases (especially outside healthcare).

• Pigeonholed as a healthcare tech supplier. Early in its history, InterSystems attained numerous end-user customers and application partners in both payor and provider segments of the healthcare industry. This explains the knee-jerk reaction of some IT professionals who assume that InterSystems is “healthcare only,” despite the fact that InterSystems diversified into multiple industries long ago (e.g., manufacturing, finance, supply chain, retail, etc.).

• Struggling to hire technical people. To be honest, most software firms find it difficult to attract and retain qualified engineers and other technical workers. InterSystems' managers know that the firm's long-term success depends on carefully inducting the most appropriate people, which lengthens the hiring process and includes more testing than some candidates would like.

• Limited pool of consultants and hirable developers. Though fully modernized and feature-rich, IRIS is still new and therefore a minority product. In turn, this limits the number of experts who know IRIS and the tools built atop it. This skills gap can be a deterrent for some prospects.

• Late to market with 21st-century D&A technologies. This includes cloud, advanced analytics (such as artificial intelligence), data fabric, data lake, and some forms of open-source software (OSS). In defense of InterSystems Corporation, their rather conservative customer base was probably not ready for these until recently. Don’t forget: InterSystems R&D tends to be driven by customer and partner demand, which sometimes materializes late in the vertical and geographic markets where InterSystems operates.

OPPORTUNITIES

Given InterSystems’ ample maturity and resources, there are many positive things its people can do to further their causes and extend their customer base:

• Extend existing data fabric functions. Future goals could be data semantics for data virtualization, single views, miscellaneous data products, and AI-driven automation for the capture and development of fabric entities (e.g., metadata entries, catalog categories, data lineage trails, quality metrics, etc.).

• Create more and deeper vendor partnerships. This should include tool vendors for data integration, quality, semantics, BI, AI, and data warehouse automation.

• Continue to diversify the analytics processing of the core data platform. For example, consider tool functions and DBMS optimization for dimensional models (e.g., star and snowflake schema) and slowly changing dimensions, as seen in data warehousing.

• Build a self-service BI facility within IRIS. For example, create a GUI based on natural language processing (NLP), GenAI-driven automation, and perhaps vector search. Deeply automated self-service access to data is a common desire for both executive and technical end-users in many industries.

• Support more data documents, file formats, and external tables. Expand existing support for XML and JSON to also support Parquet, Iceberg, and Delta Lake. These are common in post-modern supply chains and analytic data lakes, which are targets for InterSystems' outreach programs.

• Reach out beyond healthcare. Advertising, direct mail, regional seminars, and exhibiting at all the big tech conferences might help InterSystems propagate its brand more broadly.

• Continue to contribute to the D&A community. Continue participation through the Ragon Institute, programs at MIT and Harvard, and projects for OSS and open data standards. This fosters the philanthropic spirit that Terry Ragon and InterSystems have become known for, and it introduces more data and developer professionals to IRIS.

THREATS

At the Analyst Day, Scott Gnau emphasized that InterSystems will continue its successful role as a provider of database and analytics infrastructure which applications developers can embed in a wide range of commercial applications. To complement that, however, InterSystems hopes to increase the direct sales of such infrastructure directly to corporate IT departments and D&A teams. The expansion of sales efforts will take InterSystems into markets and situations that are new to them, and so they will face new challenges:

• Competing in D&A niches where InterSystems has little experience. The list of competitors will lengthen and evolve as InterSystems seeks more DBMS-only deals. Likewise, as InterSystems operates more in areas it barely knows (cloud-based development, multiple forms of AI and analytics, developers who demand open-source tools) they will discover new competitors and user requirements, as they go.

• Partners poaching customers is possible. I have heard tales of Amazon folks steering users of non-Amazon DBMSs toward one or more of the DBMSs that AWS offers.

• Competing with “good enough” systems that are less expensive, yet inferior. Native CSP offerings and some OSS DBMSs are increasingly good enough to satisfy users’ technical requirements at a moderate level, which may tempt users away from IRIS. This is especially true of Microsoft Azure, the plethora of AWS DBMSs, Snowflake, Databricks, Couchbase, Redis, etc.

• Favoring existing markets over new ones. As InterSystems expands its reach, it must maintain existing direct customers and application partners, yet provide the resources to find and farm prospects elsewhere. This will be a resource-intensive balancing act.

FIGURE ONE