Teradata Acquiring Aster Data, Driving MapReduce Deeply Into Its Strategy

It was just a matter of time. Aster Data, one of the most innovative startups in the enterprise data warehousing (EDW) arena, is moving rapidly into the ranks of leading vendors in this hotly competitive space. Just this morning, Teradata, one of the longtime EDW powerhouses, announced that it is acquiring San Carlos, California-based Aster Data. This $263 million all-cash deal, expected to close in the second quarter, will bring Aster Data’s well-regarded brand, exceptional team, growing product portfolio, and sophisticated intellectual property (IP) fully into Teradata.

For starters, the acquisition further substantiates several market trends that we called out in the recent Forrester Wave™ on EDW platforms:

  • Vendor consolidation proceeds apace. The EDW market has largely consolidated, though startup activity remains strong. Customer demand for one-stop shopping has driven consolidation and demand for completely integrated appliance-based EDWs, and, increasingly, for cloud- and software-as-a-service (SaaS)-based access to the same functionality. The past year has seen SAP acquire Sybase, IBM purchase Netezza, EMC buy Greenplum, HP announce its intention to absorb Vertica — and now this latest bombshell deal. Clearly, Teradata — the long-ago first mover in EDW appliances — is acquiring Aster Data in part for a strong appliance-based offering of its nCluster platform, which is architected for modular scaling of MapReduce operations.
  • Cloud/SaaS EDWs come into the enterprise. Over the next two to three years, cloud/SaaS EDWs will gain greater enterprise adoption as a complement or outright replacement for appliance- and software-based EDWs. Already, Teradata stands out through its ability to offer the most mature and comprehensive range of cloud/SaaS-based EDW offerings on the market, while Aster Data has been one of the leading pure plays with a predominant focus on cloud/SaaS deployments for Web 2.0, social media, and other hot new applications. In this regard, the architectural synergies of Teradata and Aster Data are considerable. Both offer petabyte scale-out shared-nothing massively parallel processing, support elastic resource provisioning for mixed workloads in federated EDW deployments, and integrate with external Hadoop Distributed File System clusters for analytics against unstructured sources. In addition, what Aster adds to Teradata’s solution portfolio is an increasingly important cloud EDW capability: optimization of massively parallel “graph analysis” against clickstreams, social media messages, and other event data types. This functionality will prove invaluable in the new age of social commerce.
  • In-database analytics and transaction processing transform the EDW’s roles. Increasingly, EDWs are deployed at the heart of the next-generation customer relationship management (CRM) environment, executing and integrating analytics and transactional computing functions to enable pervasive next best actions in multichannel customer service, sales, and marketing. The current best-of-breed EDW platforms support analytics-driven multichannel CRM through features such as MapReduce, in-database function pushdown, embedded statistical algorithm libraries, predictive modeling integration, and mixed workload management. Both Teradata and Aster Data are especially strong in these areas. Teradata already has a strong multichannel campaign management portfolio, which it strengthened recently by acquiring Aprimo. What Aster adds is the ability to support further scaling and acceleration of next best actions by integrating both types of next-best-action workloads —analytics and transaction processing — in a unified cloud architecture. In this important new architectural paradigm, which Forrester calls the “analytic application server,” Aster’s closest competitor has been Oracle’s Exadata platform. Clearly, Teradata now has an important new asset for fighting off this formidable rival.
  • Social media drive unstructured data and real-time architectures into the EDW. Marketing, sales, and customer service professionals everywhere integrate social media into their business-to-consumer customer-facing processes. A key application is social media analytic dashboards to monitor customer awareness, sentiment, and propensities in real time. To address these requirements, and the convergence of in-database data mining and text analytics, both Teradata and Aster Data have incorporated support for unstructured sources, hybrid storage architectures, in-memory execution, distributed cache, and real-time processing into their architectures. In addition, both have partnered with SAS Institute and other advanced analytics vendors that provide the algorithm libraries to support high-volume low-latency mining of social-media-sourced customer intelligence from disparate sources. What Aster brings to Teradata is one of the deepest libraries of MapReduce algorithms to bootstrap customer development and deployment of social media analytics in “Big Data” cloud EDWs.

In addition, the acquisition will address what has increasingly become a Teradata competitive vulnerability: its ability to only offer customers a single, proprietary (albeit highly scalable and robust) database management system (DBMS) within its EDW portfolio. As we noted in the recent Forrester Wave, EDW customers increasingly require a choice of DBMS so that they can deploy and tune the optimal database architecture to each analytic node, server, or cluster. With Aster nCluster, Teradata is acquiring a DBMS that, like Teradata’s core DBMS, is row-based relational, but which is evolving into a virtualized platform with agile integration of graph database and other “No SQL” architectures.

No, the acquisition of Aster Data will not improve Teradata’s standing in the growing midmarket for EDW solutions. But that’s not as critical as it had been just a year or two ago for Teradata, which has addressed this challenge reasonably well through aggressive price-cutting and its strong go-to-market push on the 2600-series EDW appliances. What the Aster Data acquisition will reinforce is Teradata’s growing stature as a true innovator in the EDW arena, as opposed to a longtime incumbent resting on past laurels. Forrester expects Teradata to inject considerable R&D monies into its newly acquired product group and to bring Aster Data’s development team into close collaboration with Teradata Labs.

For Aster Data, the acquisition is precisely what it needs to strengthen its product portfolio and expand its reach in this hypercompetitive and rapidly evolving marketplace. Just as Netezza has benefited from access to new parent IBM’s global professional services force and partner ecosystem, Aster Data is joining a vendor that has built a formidable consulting force and strategic alliances of its own. Professional services, provided through Teradata’s consulting organization and ecosystem, will be absolutely essential for positioning Aster Data platforms into increasingly complex enterprise applications in CRM, marketing, and advanced analytics.

How will Teradata and Aster Data rationalize their respective solution portfolios? Clearly it’s too early for these companies to comment, but Forrester believes that it’s safe to assume that neither company’s customers or partners need to worry that they’ll be cut off or end-of-lifed. Forrester expects that Teradata will establish a standalone product group around Aster Data, to focus on social-facing customer analytics. We expect that Teradata will waste no time integrating Aster Data’s sales, service, and partner programs into its own global operations. And, once the deal is closed, we also expect the vendors to roll out a joint road map for integrating their respective IP and R&D across all future offerings.

At the very least, we expect Aster Data’s SQL-MR API to become a Teradata-wide standard for access to MapReduce functionality from the vendor’s growing portfolio of customer and marketing analytics tools. It’s also very likely that we will see a more comprehensive Hadoop integration road map from the combined Teradata/Aster Data by this fall’s Teradata Partners conference, if not sooner.

Now we wait to see how Teradata’s nearest competitors on EDW and CRM analytics — Oracle, IBM, and SAP — will respond. You best believe they’re all evaluating further acquisitions in “No SQL,” social network analytics, and graph analysis. 

Comments

graph

James, do you really think an RDBMS can perform "massively parallel “graph analysis” "? A graph that is so simple it doesn't really constitute a network of data, but perhaps simple links between two objects. Seems like you're believing the Aster Data marketing sheets.

Re Graph Analysis in DBMS

Short answer: no.

That's why these vendors need to scout for strategic acquisitions in the graph database segment. As I said in the last sentence of the blog.

Re Graph Analysis in DBMS

Agreed, but I've spoken with folks at Teradata and I think they're a long ways from understanding the benefits of graph databases. They are from what I can tell among the throngs of people that see simple analytics of two links being 'graph'. Kind of like the key value pair linking Twitter does and calls it graph. The Aster Data folks have been in a mad scramble on their own product so they've not been focused outside their technology.
But in general I think you're right, people will start figuring out the value of a graph database because I don't think it will be that long before you see some bigger names implementing commercial graph databases in some pretty interesting applications.

They've come around, to a degree

Based on my discussions with them, Teradata, yesterday with respect to this acquisition, they seem to have started to come around to understand the benefits of graph databases for social network analysis. But it really feels like the Aster Data team who'll be the number #1 champions for social graph analysis, and the underlying DBMSs, within Teradata going forward.

They've come around, to a degree

Good to hear, I don't see them being first to market for real graph data but every little bit helps move things in the right direction. Great blog and thanks James!

BI implications

Great post, Jim. Next, Teradata needs to realize that DW without BI is incomplete, and acquire a BI vendor like MicroStrategy. That'd be an awsome combination. Or HP or EMC will beat them to it.

Hey Boris, let's play DW-BI M&A connect-the-names

Obviously this is pure speculation, but MicroStrategy is clearly getting a lot of attention from potential suitors. They are clearly one of the strongest BI pure plays, and I, like you, would not be surprised to see them get an offer from....from who?....from any of the DW vendors who don't have their own BI product portfolio. Teradata, for one. HP (with Vertica now) for another. EMC (with Greenplum) a third. I also think MicroStrategy's BI-integrated predictive analytics and data mining tools are top-notch, and would be a great fit with any of these DW vendors' advanced analytics portfolios.

Teradata will buy Tableau?

Aster Data in a good relationship with Tableau Software and Tableau can read Aster Data nCluster and Teradata (as Data Sources), see it here: http://www.tableausoftware.com/new-features/6.0

Also traditional BI is not growing as fast as Data Visualization sector of it and Tableau is fastest growing company in BI and Data Visualization business (123% YoY as latest result). Recent LinkedIn poll about Data Visualization Tools got 1340 votes and gave Tableau 2nd place in it, see it here:
http://apandre.wordpress.com/2011/01/26/poll/

So it will be natural for Teradata to unite with Tableau one way or another.

Have you heard any rumors, or are you spreading one?

Sounds plausible, but it's not any rumor that I've heard. I think it's "natural" for Tableau or any other BI/analytics visualization tool vendor to hitch their wagon to a full-suite data warehousing and analytics firm, such as Teradata--or pretty much any of Teradata's competitors.

I am not spreading, but I am making a guess, can I?

Nothing to rumor about. And I heard nothing and I do not spread rumors. Rumor by definition is something which cannot be confirmed. So answer on your question is NO.

However if I will be a decider from Teradata, I will seriously consider an acquisition of Tableau, because soon it will be too late to do that.