Given my time zone in Cape Town, I saw the announcement yesterday evening and have had a night to sleep on it, and let a few other analysts give their first impressions, before having to come up with a considered opinion. Of course, that doesn't make it any more than an opinion!
I've been somewhat negative in the past about a number of acquisitions, particularly SAP's purchase of Sybase and HP's acquisition of Vertica, particularly around the implications for innovation in the broad business intelligence space. That opinion stems from my view of relative sizes, market positions, skill sets, cultures, and ambitions of the buyer and the bought. In the above cases, particularly, I felt the acquisitions would have a negative impact on innovation, not only in the short-term (which, I believe, is the case in most all acquisitions), but also in the medium and longer term. I'm considerably more sanguine regarding innovation and other matters when it comes to the Teradata / Aster Data deal.
In their analyst call yesterday, the two companies provided very little information on the technical integration or roadmaps of their products and focused on a very broad market positioning. To me, this is unsurprising. Having been through the acquisition process myself in a large company, I know that, for legal reasons, only a very limited number of people are privy to the discussions before the announcement. This is unfortunate, because broader company wisdom and collaborative input on architectural and technical possibilities, organizational approaches, and more is generally excluded from the initial decision. This is hardly good strategic decision-making practice; gut feel, high-level vision and personal contacts probably play too strongly.
That said, what I know about the two companies involved leads me to believe that a sensible and, indeed, exciting roadmap can be developed over the coming weeks before the deal closes. Of course, I'm making some assumptions about the thinking involved. If it's missing, I happily offer this post as strategic input :-)
Before going further, there is a general market problem around nomenclature that makes it difficult to discuss the technical information aspects of this deal. I'm referring, of course, to the ill-defined and much abused phrases "big data", "structured data", "unstructured information", and so on. I've been trying to introduce the terms "hard" and "soft information" for some time now but I'm beginning to feel that these may also prove inadequate. Sigh! Another piece of definitional work needs to be done...
With that, back to the business in hand. I see this acquisition as being all about positioning the traditional world of enterprise data warehousing and the emerging world of so-called big data. Big data is not necessarily big at all and, more to the point, includes a dog's dinner of information from different sources and with disparate characteristics. For the moment, let's call it "nontraditional information" and characterize it as the information that people like to process with MapReduce, Hadoop and its associated menagerie of open source tools and techniques. Teradata and Aster Data, like most database vendors, have a strong interest in the emerging MapReduce market. Both have strong partnerships with Cloudera. But, the most interesting point for Teradata, I suspect, is Aster Data's patent-pending integrated SQL-MapReduce function. Porting that function into the Teradata database (assuming that's possible) would provide much-needed, seamless integration between the traditional EDW and nontraditional information.
Aster Data's other key selling point has been the concept of bringing the function to the data, arguing that creating multiple copies of data for analysis through different tools is an expensive and dangerous process. Their answer has been in-database analytics. The concept of minimizing copies of data is powerful, and is an approach that I have been preaching for some years. It is also part of Teradata's philosophy. Therefore, and again subject technical feasibility, I imagine that Teradata will look to port in-database analytics into the Teradata DBMS.
None of this is to say that the Aster Data database will disappear soon. But, it would make sense that its longevity would depend on its ability to attract further customers whose requirements, technical or otherwise, could not be met through at Teradata DBMS upgraded with the functions mentioned above.
Beyond the practicalities of porting function from Aster Data into the Teradata platform--which, at the end of the day is only code, after all--what I see in this acquisition is two companies coming together with a shared understanding of data warehousing, analytics, and the emerging "big data" environment, who have demonstrated ongoing innovation in their separate existences. Provided they abandon the Treaty of Torsedillas kind of positioning described by Curt Monash, I believe this acquisition has a better than average chance of succeeding.
Posted March 4, 2011 8:09 AM
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