Blog: Richard Hackathorn

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Microsoft Acquires DATAllegro: DW Appliance Market Jumps to Center Stage

With Microsoft's announcement today of their acquisition of DATAllegro, the marketplace for data warehouse appliances (DWA) jumps to the central stage of IT drama. What began as a few emerging start-ups challenging a few big DW vendors has morph into industry game-changer.

I can grasp why Microsoft would sell a wireless mouse here and there. However, a high-end MPP DWA puts Microsoft into the center of the appliance business by delivering soup-to-nuts solutions for large corporations. I never thought that Microsoft would ship real 'iron'. Well, I am now wrong. Perhaps a corporate name change is in order. How about Microhard? (Actually, there are several 'Microhard' companies: one that does OEM wireless modems, and another that does certification training of Microsoft networks.)

I would also imagine that this action will solidify the definition of 'appliance' to mean a real end-to-end solution, which will require a mixture of hardware and software. Thus, product positioning as a software-only appliance will likely to be an endangered species.

In his blog, Stuart Frost notes that acquisition will revitalize the venture capital industry to fund emerging database technology, as was the case two decades ago. This will make the small innovative start-ups more viable, and their conversations with larger corporations more interesting.

In a phone interview, Stuart elaborated on several aspects of the acquisition. Although avoiding any actual amounts, he said that it was a 'very strategic price' that Microsoft paid for DATAllegro. They were initially approached by Microsoft to do a partnership. DATAllegro responded with ideas of putting SQL Server inside, instead of Ingres. The acquisition discussions proceeded from there.

Stuart was excited to start a new life as part of the Microsoft team. He said that he was 'been there & done that' with several start-ups, and it was time to move into different challenges, such as guiding Microsoft into EDW. He emphasized that Microsoft is taking the long-term view of this endeavor and will be flushing out whatever capabilities are required for the EDW marketplace. Stuart was pleased that Steve Ballmer mentioned the acquisition in the context of Microsoft's initiative with enterprise search, a mixture that is quite exciting to large enterprises. More will be discussed at the Microsoft BI Conference in October.

So, is Netezza next to be acquired? ...by Oracle?

Related blogs by colleagues: William McKnight, Colin White, Krish Krishnan
Tags: Business Intelligence, Datallegro, Microsoft

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