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Summary:

EMC realizes two simple facts: pure hardware is a commodity and the next industrial revolution is all about data. And that is why it is accelerating its investments in software. Today it acquired Greenplum, a 10-year-old data warehouse software company for north of $300 million.

EMC, the big storage company based in Hopkinton, Mass – realizes two simple facts: pure hardware is a commodity and the next industrial revolution is all about data. And that is why it is accelerating its investments in software. Last year it was Data Domain, for $2.1 billion. Today it acquired Greenplum, a 10-year-old data warehouse software company. The terms of the deal were not disclosed but my sources say that EMC paid north of $300 million. As part of the deal, Greenplum will become a new data computing division for EMC.

Pat Gelsinger, President and Chief Operating Officer, EMC Information Infrastructure Products, said, “The data warehousing world is about to change. Greenplum’s massively-parallel, scale-out architecture, along with its self-service consumption model, has enabled it to separate itself from the incumbent players and emerge as the leader in this industry shift toward ‘big data’ analytics. Greenplum’s market-leading technology combined with EMC’s virtualized Private Cloud infrastructure provides customers, today, with a best-of-breed solution for tomorrow’s ‘big-data’ challenges.” (Press Release)

EMC’s decision to buy Greenplum stems from the fact that enterprises are going through a data mining renaissance. IDC predicts that over the next 10 years the amount of digital data created annually will grow 44-fold. New entrants like Netezza are cashing in with their data warehousing appliances. Oracle Corp. is using Sun hardware to sell boatload of dedicated machines. And then there are IBM and Microsoft. They are all gearing up to take on Teradata, one of the largest players in the data warehousing business.

Just as collecting and aggregating data on the web has made companies like Facebook, Amazon and Google darlings of investors, large enterprises are waking up to the potential of the “big data” they have locked up in their data warehouses. (Check out my post: Can serendipity make you rich?)

Greenplum, which began its life as Metopa back in 2000, changed its name to Greenplum in 2005. It caught the big data wave early. More recently it has added a layer of business intelligence to its offerings, which is one of the reasons why the company became attractive to EMC. In April 2010, the company launched a data cloud platform and the latest version of Greenplum Database 4.0, a high-performance database software. (From GigaOM Pro: Can Greenplum become the Sun of databases?)

  1. The same commoditization forces hitting EMC at the hardware level are also nipping at the toes of the data management software providers. To succeed, firms need to move up the stack, to analytics, where Greenplum has been aiming.

    At the same time, because big data is heavy — not easily migrated– the points of control still lie at the low end of the big data stack, at the hardware and software levels where EMC is dominant.

    Which is why this merger could give Greenplum, and now EMC, a leg up over other analytics competitors.

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    1. Michael

      You know this market like back of your hand. I think you are spot on with this focus on “analytics” and that makes things more interesting. I am actually pretty surprised (in a good way) by the moves EMC is making.

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  2. The main reason why data is becoming so valuable is because it is the main fuel for artificial intelligence. A company that collects a totally new category of data in this respect is hunch: http://florianfeder.org/2010/06/29/hunch/

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    1. For sure and same goes for the enterprise data as well.

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  3. It was Metapa, not Metopa.

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