Barely a few weeks after declaring it would stop actively selling Neoview, its data warehousing platform, HP has announced plans to acquire Vertica—an analytic database vendor—for an undisclosed sum. The deal firmly places HP back within the analytic data management market and marks the first acquisition for Leo Apotheker since he took the helm at HP in November last year.
A company with pedigree
Vertica was co-founded in 2005 by database pioneer Michael Stonebraker, and is one of a growing number of providers offering columnar analytic databases. If implemented correctly and used in the right context, columnar databases can offer significant performance gains over traditional row-orientated systems. These systems structure data in columns, and work by only retrieving the data in columns referenced by a query, as opposed to having to read an entire row. This makes the design particularly suitable for faster querying and data analysis.
Other performance gains are realised by combining Vertica’s columnar database engine with advanced compression capabilities and a massively parallel processing (MPP) shared-nothing architecture—which raises scalability and performance. From a systems management perspective, the column-based approach also promises lower DBA costs. All together, these capabilities give Vertica a compelling analytic platform at a time when many organisations are looking for a more cost effective and high performance solution to power their demanding and growing analytic workloads. Many organisations are choosing to implement them as an alternative to, or complement to, data warehouses traditionally built around relational data structures. It is these capabilities together with its growing customer numbers (in the 300 range) that have propelled HP to snap up Vertica.
Vertica provides a complementary fit for HP
Although HP only recently declared it is withdrawing Neoview from the market, it is still active in BI and data warehousing services, mainly via its 2006 acquisition of Knightsbridge (a professional services consultancy). Acquiring Vertica gives the company an opportunity to leverage these data warehousing skills, resources and domain expertise in new and interesting ways. At the same time, the acquisition also gives Vertica greater geographical reach and distribution—allowing it to expand out of its core US market into Europe and parts of Asia.
Interestingly, the acquisition provides more opportunity for offering appliances by combining HP hardware and Vertica software, especially given the analytic database has no dependency on proprietary hardware. Not surprisingly this potential will also put a spotlight on HP’s recent announcement with Microsoft that saw both companies partner around a series of BI and data warehousing appliances. Although there are some similarities in use cases we believe the company will position both the HP-Microsoft appliances and Vertica as complementary capabilities. If anything, we believe this acquisition is likely to put greater competitive pressure on other columnar database vendors including big vendors such as SAP-Sybase and Oracle as well as the smaller technology vendors such as Infobright, Calpont, and ParAccel. A HP-Vertica combination provides a more formidable and stronger competitor is an already busy and noisy market.
Overall we believe this is a sensible move by HP, especially if the company wants to remain competitive against its largest rivals—Oracle, EMC and IBM—who have strong and growing portfolios; the latter two have also acquired analytics databases courtesy of Netezza and Greenplum. Equally both Oracle and IBM have capabilities that stretch far beyond back-end analytic infrastructure and include ‘front-end’ BI, analytic and performance management product sets. If HP is serious about this market (and we have no reason to doubt that it is, since Leo Apotheker has already stated he wants to grow HP’s software business) the company needs to consider whether it wants to continue with its a predominantly partner-led strategy or go down the acquisition route as a way of rounding out its analytics and data management line-up. We believe the possibility of more software acquisitions is high.