That’s the back story to Friday’s SAP Startup Forum held at the hack/reduce facility in Cambridge, Mass.’s Kendall Square neighborhood. There SAP talked up HANA, the company’s analytics database as a development platform data (or big data) applications to more than a dozen startups including Hadapt, Entagen, Diffeo, Objective Logistics, InsightSquared, Luminoso, Sqrrl, and Veracode. Those startups, in turn, were able to tout their business plans and demonstrate their products to an audience of reporters, VCs and others.

Wanted: (big) data startups

“We’re pitching to the startups and they’re pitching to us,” Scott Jones, SAP’s senior director for startup training and enablement told about 100 attendees. HANA, which debuted three years ago, has given SAP traction in an audience beyond its usual big-company ERP customer base and SAP fully intends to press that advantage.  SAP Ventures, the company’s VC arm, is increasingly active in finding and funding data startups. And it would very much like them to build their technology atop HANA.

The SAP execs repeatedly talked up HANA ONE, which runs on Amazon Web Services, as if to say “this isn’t the traditional, big iron, expensive SAP” of another era. It costs $3.49 per hour to run HANA ONE on an AWS EC2 8-core cluster.

As for the startups, many were clearly intrigued by HANA’s capabilities although none of those I talked to had actually run it. The consensus was this type of event and the promised perks — Jones offered free “no strings attached”  licenses and training — are what cash-strapped startups need. Indeed, that may be only way for a large commercial software vendor like SAP to hook small companies born-and-bred in a world dominated by free or nearly-free open-source software and rentable AWS infrastructure.

Plea to local startups: Stay put

A gaggle of area VCs were also on hand to sweet talk entrepreneurs into staying local rather than decamping to Silicon Valley after graduating from Harvard or MIT — as has been standard practice. Chris Lynch, the former CEO of Vertica Systems, who has helped nurture a big data startup community in and around Boston, was on hand to talk up that effort.

And, Dr. Sam Madden, of MIT’s Computer Science and Artificial Intelligence Lab (CSAIL) was there to help out. “Boston is an awesome place for startups — there’s a spectacular pool of outstanding, hungry young talent [here].” It helps that the VCs that used to live way out on the Route 128 corridor have relocated in closer into The Hub.

In the past two years, Kendall Square has seen a huge building boom with growing presence from Microsoft, Google, Amazon, IBM, Oracle and others. It’s a hip area to work for young techies — many of whom don’t own cars and like how mass transit and bike-friendly the area is.

Still, not every attendee was buying either pitch completely. Cyrille Vincey, CEO and founder of qunb, a data analytics and visualization startup that does use HANA, extolled its features and performance, but had one suggestion: “HANA is simple and fast. It feels like open source. Why don’t you open source it?”

And Timothy Jones, CEO and founder of Buzzient said his company, which has been based both Cambridge and Boston but is now virtual, may relocate to the San Francisco area. “We can get office space cheaper there than in Kendall Square,” he noted.

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The computer worm, called Shamoon or Disttrack by different security firms, is being compared to a series of malware that targeted Iran’s nuclear program (and reportedly could have been created by a U.S.-Israeli team). But the new malware also stands out because it attempts to make the wiped data entirely uncoverable by overwriting disks with bits of data taken from the web, and also alerts the attacker to how many files were destroyed.

The energy industry and the power grid are particularly susceptible to this kind of attack. Utilities are slow moving entities and are only just starting to add in wireless networks, software and big data storage systems. Some, like former CIA director, James Woolsey, think the smart grid needs to wake up to these security concerns. Security execs have also shown how easy it is to hack a smart meter.

Networks that control things like oil systems, nuclear plants, or water facilities could also do a decent amount of damage if they are successfully attacked and controlled. Electrical fires and shutting off power and water access could be real concerns.

Some big data focused companies are starting to create tools for the energy industry. For example, a startup called Splunk has a tool for oil and natural gas pipeline networks that lets the pipeline owner detect changes in sensor data in real time, enabling the owner to detect if areas have stopped reporting or have under gone changes in pressure. A big data startup called Sqrrl just raised $2 million to build out technology to make big data applications more secure.

I think one of the issues is that all of that innovation and money being invested into “big data” these days needs to trickle down to applications and tools for the energy sector. If utilities and power companies are going to ultimately be IT firms, they should start benefiting from that ecosystem and innovation.

Image courtesy of Greyweed.

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Co-founded by CEO Oren Falkowitz, sqrrl is parlaying the Apache Accumulo project – which is in turn based on Google’s BigTable key value store. “Everyone knows big data is hot, but there are concerns around security that keep it from reaching its full potential,” Falkowitz said in an interview.

What sqrrl will be able to do is segment out a file — say an electronic health record (EHR) — into many parts which can then be locked down or left open as needed.

“An EHR might have a hundred or a thousand components and if any one of those requires an extra control, like the patient’s social security number, the current method is to control that entire record. We have fine-grained access model so you can assign different security to the patient name, to allergies, to medications, to doctors names–they can all be individually controlled,” he said.

The company has seven employees now but plans to staff up aggressively — it just moved from the Washington, D.C. area to Cambridge, Mass. to better tap into the reservoir of big data expertise in the area.

It also netted some big name advisors in its choice of investors. Chris Lynch, former CEO of Vertica, now part of HP, is advising the company, as is Matrix Partners’ Antonio Rodriguez.

While it seems counterintuitive that the NSA would open-source technology it has fostered, there is at least one precedent. The agency, for example, developed SELinux, or Secure Enhanced Linux, a hardened version of the popular open source operating system, Falkowitz said.

Asked about the company’s unusual name, Falkowitz said the way current companies deal with sensitive data — basically hiding it away as squirrels do with acorns — is what informed the decision. “With our technology, companies resolve that problem — there’ll be no need to hide your data to make it more secure,” he said.

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