Dell Avoids Aster and Dodges a 296 Million Dollar Mistake

March 4, 2011 Leave a comment

Another one bites the dust as Teradata has acquired Aster Data for a reported $263 million.  This represents 89% of Aster Data shares as Teradata already owned 11% of Aster bringing the true acquisition cost to $296 million or $275 million after subtracting Aster’s $21 million in cash.  In any case, that’s a lot of money for a company of Aster’s age and size.

For Teradata this acquisition makes sense as they continue to compete against HP (Vertica), IBM (Netezza), EMC (Greenplum), Oracle, and SAP (HANA).  Teradata is faced with an age-old question for technology companies; hold on to their proprietary ways of the past or reach for the open and commoditized ways of the future.  It is not clear to me which direction Teradata will choose. However, it is clear to me that, unlike Dell, Teradata is the right company in the right industry to make such a gamble on Aster; the database guru’s at Aster, Tazo Argyros and Mayank Bawa, will find themselves at home within the halls of Teradata.

While I applaud Dell for continuing to blaze their own path, it seems others within the technical community are harder to please.  Per Gigaom’s Stacey Higginbotham’s article posted on March 3, 2011:

“So for Dell, and any other big data wannabes out there, the only proven options left to
start fulfilling this niche are ParAccel, Infobright, and Ingres’s VectorWise Platform.”

I’d hardly call Dell a “big data wannabe” and perhaps some have misconstrued their attempted acquisition of 3Par as a precursor to Dell entering this space.  In fact, Dell has been quite clear that any software acquisitions must have an impact on their strategic lines of business.  While Aster and other big data start-ups have the potential of driving Dell’s server and storage sales, their valuations and competitive landscapes make them a risky move for Dell.

Dell is quickly becoming the king of “Cloud Neutrality” as they are providing key pieces of the solution to their customers while working with various infrastructure providers such as Juniper, Cisco, and more. By purchasing disruptive Cloud software companies within the areas of management, orchestration, security, and monitoring, Dell could further their leadership in this market.  Think the completion of UEC; very exciting!

Since I’ve never started a billion dollar company from my dorm room, I’ll defer to Michael Dell to make the right moves for his company.  Perhaps they’ll enter the big data market with a smaller software acquisition and integrate it into other cloud offerings thereby indirectly attacking the market.  For now, Teradata has gotten a bit stronger while Dell has avoided a $296 million mistake.

Filed under Cloud Computing, M&A Tagged with , , , , , , , , , , , ,

Note To Dell: Forget Big Data and Go For Cloud Infrastructure

February 16, 2011 1 Comment

It seems like five seconds after HP purchased Vertica, the entire world focused on Dell and their big data strategy.  This was further compounded by the fact that Dell blew out their earnings with a $15.7 Billion fourth quarter and Michael Dell suggested that they would target smaller acquisitions to help their server and storage divisions.

Speculation is rising that Dell will purchase Aster Data Systems a Stanford University start-up that is backed by Sequoia Capital.  Aster’s nCluster sports a massively parallel processing (MPP) data warehouse with integrated MapReduce that is built on commodity hardware.  Whose commodity hardware?  You guessed it, Aster partners with Dell to provide the Aster Data MapReduce DW Appliance.

However innovative and powerful Aster’s solutions are, their rumored valuations are sky high.  According to Gigaom’s article Cloud Startup Values are Getting Insane published on September 24, 2010, Aster’s valuation is rumored, “somewhere between $85 and $120 million.”  Furthermore, Aster took issue with Gigaom’s assessment saying, “The valuation you/GigaOm stated recently is more reflective of the previous B round that closed Q4 2008, and while we don’t disclose the actual valuation of the latest C round it is in fact materially greater than the Series B.” Really?  Let’s get back on track.

Dell is a remarkable turnaround story that is predicated on their decisions to blaze their own trail in the industry.  Rather than purchase network equipment or security vendors, Dell has been acquiring interesting software companies such as Scalent, Boomi, and Insite One, with a purpose or focus on the Cloud.  Why change this focus?  When you think Dell do you think database warehousing? Software?

Dell’s future growth hinges on their Data Center Solutions (DCS) and Cloud Computing.  They have two choices; make a major market disrupting acquisition or take some risks by purchasing smaller but highly disruptive software companies.  It’s no secret that I am a proponent of Dell purchasing Rackspace, even in the face of a rising market valuation and the prospects of another bidding war.  Rackspace is that good and Dell knows it.

Enough, who else should Dell purchase?  There are the obvious, Joyent, and the obscure, Nimbula.  They could lean forward, OnApp, or take a risk, Appistry.  They could choose infrastructure, GoGrid, or go a bit crazy, Marathon Technologies.  They can go services, Appirio, or go international, ElasticHosts. And on, and on, and on, …

Regardless of what path Dell chooses, Michael Dell has done one incredible job of turning and changing the course of a $60 Billion company. While some have written that Dell is “yesterday’s company”, I’d watch out as they may just surprise you and the entire industry.

Filed under Cloud Computing, M&A Tagged with , , , , , , , , , , , , , , , ,

Google gets the Hype; Oracle and IBM get the Business

June 12, 2009 Leave a comment

Google announced a new on-line database called Fusion Tables using technology they acquired from Transformic.  Transformic pioneered the use of data-spaces; a technology that has been around since the early 1990s.  Unfortunately, this technology was “useless” until the great brains at Google got their hands on it and now it’s going to shake up the entire database market.

It obvious to some writers and analysts, that Google has better talent than Oracle and IBM combined.  After-all, they now have data-spaces and Fusion.  Does Oracle or IBM have this? Wait, Oracle has Fusion; are we looking at a lawsuit? What about Teradata or Aster Data or Greenplum, or Postgress, or MySQL, or Netezza, or EnterpriseDB, do they have it?  If Google has it you can bet it’s better than everyone else’s.

Why is it that Google can do no wrong?  Search, Adds, Maps, Email, IM, Calendar, Web Sites, Phones,  Free Lunches, Video, Blogs, Free Dinners, Databases, Home Power Management, and, let’s all keep our fingers crossed, Netbooks.  Google should just buy Microsoft, IBM, and Oracle outright and put them out of their misery.

Let’s get the facts straight.  Oracle and IBM are dynamic companies that rule the database market.  In fact, Oracle and IBM have diversified products and services that are helping them through this tough economy.  Additionally, they have advanced R&D, patents, deep pockets, and access to the world’s largest and most powerful enterprises.  Finally, they are keenly aware of cloud computing and what that means to their businesses; i.e. databases.

Google has Advertisements.  While Ads are a great thing, hopefully one day people will rise up and say enough.  Enough profiling, enough storing information, enough analysis, enough of collecting personal data, enough, enough, enough.   Perhaps Google should look to improve their core businesses because the competition is heating up for Search and Ads.

Google get’s the hype; Oracle and IBM get the business.

Filed under Misc Tagged with , , , , , , , , , , ,

The Sun Shines on Oracle

April 20, 2009 1 Comment

What a way to start the day as the Sun is shining bright on Oracle! Ellison has guts, vision, a good management team, and the cash to swoop in and throw the DB, Virtualization, storage, and server market on its head.

Oracle and Solaris are like bread and butter. Oracle gets to defend their high-end database deployments by ensuring that Solaris has a future. They also pick up MySQL and overnight they go form open source wannabe to an open source powerhouse. They also get access to Sun’s investment in Greenplum (petabyte data warehousing). Additionally, Oracle has opened a front against HP, IBM, and Cisco by combining not only selling applications, but also hardware.

However the real gems are Sun’s virtualizaton and datacenter solutions. Oracle now has the ability to compete head-to-head with VMware, Citrix, Red Hat, and Microsoft for virtualizaton supremacy. They now own Sun’s xVM products and solutions that are cutting-edge. Finally, Oracle has the ability to compete with Cisco’s datacenter vision by not only packaging routing/switching/storage but also applications into a virtualized system.

Mark your calendars, April 20th 2009 may become the day IBM regrets for years to come. If Cisco can’t get their hands on VMware, they may be stuck in the what-could-have-been blues. HP must adjust to new competition and Dell has got to be thinking what-about-us? Netezza, HP, and Teradata have awoke to a significant change in the industry and stronger competitor. Finally, this industry may never be the same as a software giant has entered the hardware business.

Sun needs three things to be successful; the right management team (check), the right strategy (check), and market reach and power (check). Who would have ever thought Oracle would break the software only paradigm? More M&A to come, but hats-off to Oracle.

Filed under Misc Tagged with , , , , , , , , , , , , ,

Three Cheers: Juniper, Microsoft, Brocade

July 25, 2008 Leave a comment

Juniper:  Juniper says good-bye to outgoing CEO Scott Kriens and hello to new CEO Kevin Johnson.  While Mr. Kriens has done a great job in getting Juniper to a $3 Billion company in 12 years, he has yet to “crack the code” on beating Cisco on their home turf; enterprise customers.  Juniper needs new leadership to push their vision, innovation, and to speed the development of new products.  Perhaps it’s time for Juniper to stop chasing Moby Dick! 

Microsoft:  Microsoft shows true vision by purchasing DATAllegro and advancing massively parallel processing (MPP).  Microsoft’s purchase should be a warning to established MPP vendors such as Teradata while newcomers such as Aster Data may have awoken the sleeping giant.  Finally, Microsoft’s decision may push Oracle into MPP as a follower not a leader.  Perhaps it’s time for Microsoft to get some credit for “non-Google” thoughts!

Brocade:  Brocade’s $3 Billion purchase of Foundry Networks is both gutsy and a gamble.  Brocade’s dominance in storage networking combined with Foundry’s IP centric product line could spell trouble for Cisco.  Additionally, Foundry may have finally found shelter and breathing room from Juniper but will Bobby Johnson (Foundry CEO) finally give up control and allow Foundry to follow new leadership and go in a new direction?  This purchase signals the opening salvo in the battle for the next generation datacenter with plenty more to come.  Perhaps it’s time for Brocade to stand-up to the King!

Filed under Three Cheers Tagged with , , , , , , , , , ,

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