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HP's Vertica purchase to herald analytics acquisition spree?

17th Feb 2011
Managing editor MyCustomer.com
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Hewlett-Packard’s purchase of real-time analytics software vendor Vertica is likely to signal the start of an acquisition spree in the highly competitive analytics and data management space as it seeks to fill gaps in its enterprise data warehouse portfolio.

The vendor has signed a definitive agreement to buy privately-held Vertica for an undisclosed sum and the deal is expected to close in the second quarter of this year.

But analysts said that, while the move, which comes only weeks after HP unveiled plans to stop actively selling its Neoview data warehouse platform, had put the supplier back as a serious contender in the data analytics game, it was also likely to attempt to grow its presence further via acquisition.

Helena Schwenk, a principal analyst at MWD Advisors, said in a blog that, despite removing Neoview from the market, the vendor was still active in the business intelligence and data warehousing services sector, mainly via its 2006 acquisition of professional services consultancy Knightsbridge.

Therefore, the purchase was a "sensible" one if HP wanted to remain competitive against its largest rivals in this space – Oracle, EMC and IBM.

"Acquiring Vertica gives the company an opportunity to leverage these data warehousing skills, resources and domain expertise in new and interesting ways," Schwenk said. For example, the move could see HP providing Vertica-based BI and data warehousing appliances on top of the Microsoft-based offerings that it already sells and which are likely to be positioned as "complementary" rather than competitive.

But she added: "If HP is serious about this market (and we have no reason to doubt that it is since Leo Apotheker [CEO] has already stated he wants to grow HP’s software business), the company needs to consider whether it wants to continue with its predominantly partner-led strategy or go down the acquisition route as a way of rounding out it analytics and data management line-up. We believe the possibility of more software acquisitions is high."

James Kobielus, an analyst at Forrester Research, agreed. He said in a blog that the acquisition represented a "strategically critical step" for HP towards providing a full stack of integrated EDW offerings.

Neoview had suffered from "strategic inattention" and an "incoherent go-to-market strategy", was "too expensive" and had "no clear competitive differentiators", Kobielus claimed.

But it also failed to win high levels of market adoption because HP "lacked (and still lacks), the broader data analytics solution portfolio that it will need to bundle with its EDW platforms (past, present and future) and support with its professional service offerings".

As a result, Kobielus believes that HP will "pull the trigger on near-term acquisitions in the business intelligence, data integration, master data management and predictive analytics markets".

But he warned that long-term success was not assured. "HP/Vertica are not guaranteed to rock the EDW market unless they have the same laser focus on price-performance and solution packaging as their rivals. Neither HP nor Vertica has a strong track record in either of those areas, so Forrester urges cautious optimism regarding the long-range prospects for this hook-up," Kobeilus said.

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