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Hitachi Data Systems To Buy Big Data, IoT Developer Pentaho

The acquisition's impact will be widespread as Pentaho's technology is expected to permeate throughout all of Hitachi, including its industrial business.

Hitachi Data Systems plans to acquire Pentaho as a way to bring that company's big data analytics and Internet of Things technology not only to the HDS storage business but to permeate it throughout its parent company, Japan-based Hitachi Ltd.

Orlando, Fla.-based Pentaho develops a big data analytics and business data analytics platform that will be a significant and important addition for HDS and Hitachi, said Kevin Eggleston, senior vice president for social innovation at HDS.

"The capability that Pentaho brings to market applies to all of what Hitachi does," Eggleston told CRN.

[Related: HDS Intros New Storage Virtualization OS As Foundation For All Future Storage Offerings]

Hitachi's social innovation strategy has been to bring big data and the Internet of Things, or IoT, to market by combining it with Hitachi's large industrial and IT capabilities, which it can bring to bear to focus on the business, Eggleston said.

"Hitachi Data Systems is the largest IT part of Hitachi, so we're taking the lead in big data and IoT," he said. "But Hitachi is a large company. The industrial side has companies building machines that use big data and IoT to make their offerings more useful to customers."

On the IT side, HDS plans to integrate Pentaho's technologies into its own analytics platforms as part of solutions for health care, machine-to-machine computing, public safety, automotive and connected cars, and energy, Eggleston said.

Quentin Gallivan, CEO of Pentaho, said his company's technologies are based on three major open source projects. These include Kettle, an open source data integration and big data integration engine; Mondrian, a commercial open source online analytical processing (OLAP) engine; and Weka, an open source machine-learning system for data mining.

Pentaho has used these three projects as the foundation of a commercial platform for easily helping customers move data and blend unstructured data with machine data, and to embed analytics into applications, Gallivan told CRN.

"We are a part of the big data fabric," he said.

Neither Eggleston nor Gallivan would discuss how much HDS is planning to pay for Pentaho. When asked about a Bloomberg report that HDS plans to pay between $500 million and $600 million for the company, they would only say that the acquisition is the biggest ever of a privately held big data company.

If so, the deal is a big one.

NEXT: A Lot Of Acquisition Activity In The Big Data Market


Salesforce.com in July unveiled a $350 million acquisition of RelateIQ, which sells a "relationship intelligence platform" that gathers and analyzes data from salespeople's interactions with contacts, including email, calendars and smartphone calls.

Enterprise information management company OpenText last month unveiled the closing of a $330 million acquisition of Actuate, a developer of personalized analytics and insights software.

TIBCO last May acquired Jaspersoft, a developer of open-source business intelligence reporting, analytics and visualization tools, for approximately $185 million.

More recently, HP this week acquired Voltage Security, a developer of encryption technology targeting big data.

Gallivan described Pentaho as a late-stage, venture-capital-backed company that is currently more focused on aggressive growth and hiring than it is on becoming profitable. The company has so far received $60 million in funding, but until the pending acquisition closes, it has not received any funding from Hitachi or HDS.

However, Gallivan said, the two companies are not strangers. They have ties stretching back about 18 months, and in the fall started a relationship under which Hitachi OEM's Pentaho's technology, he said.

The acquisition comes at a time when solution providers with a strong storage background are starting to look at big data opportunities, said Joe Kadlec, vice president and senior partner at Consiliant Technologies, an Irvine, Calif.-based solution provider and HDS channel partner.

"Customers are talking big data more and more," Kadlec told CRN. "Some companies have made inroads over the past few years. But it has taken time to trickle down to midrange companies."

Adopting big data technologies is a part of how Consiliant plans to grow, and it looks forward to working with HDS and the Pentaho technology, Kadlec said.

"We have transformed our business, growing our services revenue by 300 percent over the last couple of years," he said. "We couldn't do that just by selling hardware. We need services."

Kadlec said HDS has a proven track record when it comes to acquisitions, and pointed to HDS' 2007 acquisition of Archivas, a developer of software for archiving and compliance, and its 2011 acquisition of high-performance NAS technology developer BlueArc.

"Those were two great acquisitions," he said. "Hitachi, in my experience, likes to create, and leverage, technology from other Hitachi companies."

PUBLISHED FEB. 12, 2015

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