France-based BI startup BIME Analytics announced Tuesday its acquisition by cloud-based customer service platform vendor Zendesk. A day later, Syncsort, a company focused on the integration of Big Data and mainframe technologies, announced its own acquisition by Clearlake Capital. And just a week earlier, IBM announced that it would be acquiring Big Data storage vendor Cleversafe.
That's a lot of deals in a short period of time, but it's just a reminder of the broader set of acquisitions that have taken place in the data arena since the beginning of last year. At this point, I'd say it's a good idea to take inventory of these deals and the relative categories or "buckets" they've fallen into. It can help forecast what deals may come next but, perhaps more important, it provides a list of likely outcomes for companies that are still independent, which will be useful to those companies' customers and prospects.
Teradata orders the Hadapt-Revelytix-RainStor combo, Cloudera gets Gazzang
The most obvious category of acquisition describes cases of a larger vendor in the space deciding to buy, rather than build. That's what happened when Teradata acquired Hadoop-data warehouse mashup pioneer Hadapt and Big Data information management vendor Revelytix back in July of last year, as well as high-compression storage vendor RainStor this past December. In all three cases, Teradata picked up companies that were working to bring mainstream data management/storage technologies and Hadoop closer together. For a pioneering data warehouse vendor, that makes sense.
Cloudera, one of Teradata's partners in the Big Data space, has done a few deals of its own. When the Palo Alto, CA-based firm scooped up Big Data security player Gazzang, it clearly sought to shore up the Enterprise bona fides of its Hadoop distribution. After all, Enterprise deals are what's truly needed to monetize Hadoop.
IBM builds out its cloud with Cloudant and Cleversafe; Microsoft does likewise with Revolution Analytics
Just as Big Data players want Enterprise cred, Enterprise software companies want their analytics offerings to be taken seriously. When Microsoft acquired Revolution Analytics this year, it was clear that the Redmond, WA-based software giant wanted to embrace yet another open source technology (the R programming language, in this case), and on-board the expertise necessary to merge it into both its conventional relational database products, as well as its ever-growing cloud data platform.
And speaking of cloud, when IBM acquired NoSQL vendor Cloudant last year, it structured the deal in a way that put Cloudant and its Softlayer cloud group (which IBM had acquired in 2013) together. IBM's acquisition of Cleversafe is also aimed at strengthening Big Blue's cloud platform. But its about Big Data too, as Cleversafe's distributed storage mechanisms mash up in interesting ways with Hadoop, and eliminate the vulnerability that can come of the single active "name node" used in Hadoop's file system.
Oracle- BlueKai, Zendesk-BIME; building out the analytics bench
When Oracle bought marketing analytics-focused BlueKai last year, it enhanced not just its data and analytics prowess but adeptly complimented its application business too. And as each of those migrates to the cloud (however slowly), BlueKai aligns quite well.
Sometimes a company that uses technology to monetize it in a different industry may make a tech acquisition that can enhance its proprietary capabilities. No doubt this was Zendesk's motivation for acquiring BIME, especially given that product's penchant for connecting to cloud based data sources, including Zendesk itself.
FICO enters the Karmasphere, Advance/Newhouse dials 1010Data
When FICO, the software company behind the credit score of the same name, acquired Hadoop analytics pure play Karmasphere last year, it brought crucial Big Data analytics capabilities into its business. Given that credit scoring and, more generally speaking, financial risk management are fueled by statistical analysis, that was a shrewd move.
When Advance/Newhouse (which owns all Condé Nast publications, Brighthouse Networks and numerous other media properties) acquired in-memory database vendor 1010data in August, the reasoning behind the deal seemed cryptic to many industry watchers. But consider that media is completely advertising-driven, especially in the online world, where publishing has been going for quite some time. Could Advance/Newhouse have designs on a homegrown real-time bidding system that beats out other platforms? The company may feel that 1010Data's technology, combined with its Web, TV subscriber and magazine/newspaper reader data, could provide competitive advantage.
Commercial buys open source: Hitachi Data Systems-Pentaho, TIBCO-Jaspersoft
When Hitachi Data Systems (HDS) announced its intent to acquire BI vendor Pentaho in February, it articulated clearly that the Pentaho product portfolio would continue as its own offering. Much as IBM does with Cognos, HDS may well see the technology and the people behind it as very strong assets as it delivers on its services engagement projects. Having the product team in the company's own employ could help it deliver more reliably and with lower cost. And the power to effect customization work could help the grow pipeline and shorten sales cycles.
Pentaho's initial go-to-market hook was the open source foundation of its platform. Another BI company to ride that wave was Jaspersoft, which was acquired last year by TIBCO Software. Having already acquired complex event processing vendor StreamBase in 2013 and data discovery player Spotfire all the way back in 2007, TIBCO has grown its focus from pure middleware and messaging to include analytics on such real-time transactional data.
Private equity goes private shopping
In fact, when TIBCO itself was acquired by Vista Equity Partners in a deal announced a little over a year ago, investment in that space was the goal. Robert F. Smith, Vista's Chairman and CEO said as much at the time: "We look forward to working with the talented management team and employees to accelerate TIBCO's growth and strengthen its leadership as a complete fast data platform..." (emphasis mine).
Why did private equity firm Clearlake Capital acquire Syncsort? It may have seen potential value in Syncsort that it felt could be realized more quickly with its own resources. An outright acquisition can be more effective than even a significant investment in this regard, as it gives Clearlake complete control. Syncsort's mainframe heritage gives it strong insight into mission-critical Enterprise needs and Clearlake may see that as a niche of great opportunity.
So, buy vs. build (especially in the cloud wars) is driving some of these deals, as one would expect. But enhancing proprietary platforms, and buttressing technology services offerings is too. Adding data analytics to platforms originally built for mere data integration is another. And emancipating value through accelerated growth is attracting even private equity firms into the data space.
With so many independent players left, and the variety of motivations for acquisitions so great, the number of potential suitors and deals is far from exhausted.
Hypothetical questions; practical observations
Might a data prep or Big Data analytics player get acquired by an Enterprise software mega-vendor? Or would the big guys be shopping for a NoSQL or Hadoop distribution vendor instead?
Could a financial services company buy a streaming data platform vendor? Perhaps a visual analytics company, be it public or private, will get absorbed by a media company with interest in the news and information space.
It seems inevitable that at least a few such deals will take place next year and maybe there's one left this year, too. Customers should be ready to embrace such change, because it's a hallmark of a maturing technology category. The data world needs this maturation, because customers are demanding it. Now all they have to do is choose their platforms wisely.