As data storage capacities increase and costs drop, builders of data storage systems are always flirting with the threat of commoditization – a race the growing use of data storage services such as Amazon’s S3 (Simple Storage Service) is sure to accelerate.
EMC’s plans to acquire data warehousing technology developer Greenplum is part of the company’s effort to stay ahead of that curve, moving up the value chain from data storage to data management and information analysis.
Tuesday EMC said it would acquire privately held Greenplum for an undisclosed sum; the deal is expected to close in the third quarter.
EMC, of course, is much more than a data storage system builder. The 50-plus acquisitions it has made in recent years include enterprise content management application developer Documentum and data discovery and archiving software vendor Kazeon Systems.
The challenge for EMC, which bills itself as a supplier of “information infrastructure solutions,” is to keep adding new products that help customers not just store data, but also derive value from it. Greenplum, based on the PostgreSQL open-source database and a massively parallel processing (MPP) architecture, provides a way for business to offer their employees and customers self-service business analysis capabilities.
What’s missing? While Greenplum offers ways to access information stored in the database, EMC’s next step might be to acquire a supplier of business intelligence and analysis software. While many of the leading BI application vendors were snapped up several years ago (IBM bought Cognos, SAP acquired Business Objects and Oracle bought Hyperion), there are still any number of BI software vendors EMC could buy to add to its data storage/management/analysis stack.
In announcing the acquisition, EMC said Greenplum would form the “foundation” of a new data computing product division. But the company is staying mum on just what else might be added to that new operation.
One thing that’s clear is that the Greenplum acquisition means EMC will be competing more frequently with Oracle and IBM, who both market their own data warehouse product lines. (EMC and IBM have long competed head-to-head in the data storage system arena. Oracle, through its acquisition of Sun, also now competes more directly with EMC in data storage.)
EMC’s Greenplum buy is just the latest development in the shifting data warehouse industry. Microsoft acquired data warehouse appliance vendor Datallegro in 2008 while SAP is in the process of acquiring Sybase, a player in the data warehouse software market with its Sybase IQ system. And Oracle is making a push at the high end of the data warehouse market, now dominated by Teradata, with its Exadata data warehouse system.
All this raises questions about the future of other, independent data warehouse appliance makers like Netezza and “virtual” data warehouse appliance software developers such as Kognitio, Vertica and ParAccel. Could any of them be on the auction block?