Dell Avoids Aster and Dodges a 296 Million Dollar Mistake

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.

Technology: A bright future!

Today’s technical headlines are dominated with the likes of Cisco, Juniper, IBM, HP, Oracle, Microsoft, Intel, Google, Research In Motion, Apple, Dell, SAP, Nokia, and more. The common denominator with all these companies is size; size of their revenue streams, size of their sales forces, size of their channels, size of their bank accounts, size of their checks to Gartner, Forrester, EMA, etc. and more.

Some companies believe in organic growth while others prefer inorganic growth through large and small acquisitions. Some spend time winning and keeping customers happy while others would rather spend money on fancy marketing campaigns. Some have grown so large that they compete with themselves while others seem lost defending tired old positions and ideas. Some have executives that are the envy of the industry while others are saddled with executives born out of the dot com boom.

We have lived through HDLC, X.25, Banyon Vines, Frame Relay, ATM, Token Ring, Twin-X, give way to Ethernet, Wireless, MPLS, and more. We’ve lived through the wars between OS/2 and Windows, Active Directory vs. Novel Directory Services, Word Perfect vs. Word, Cisco vs. Motorola, Palm vs. RIM, Inktomi vs Google, and more. We saw RISC vs CISC, Unix vs Linux, Mainframe vs. Servers, Distributed Computing vs Datacenters, Mainframes vs. servers acting as mainframes, Virtualization vs. everything, and more.

While we have come so far, we have so much further to go. While the Internet has become a nice to have to a must have, it remains slow, unsecured, and unreliable. While TCP/IP binds us together, it has created a new wild west for criminals and electronic warfare. While we cannot live without our mobile phones, we can’t drive across town or enter our homes without the connection dropping. While everyone’s memories are electronic, data back-up remains cumbersome and an afterthought. While we crave open standards, we are saddled with proprietary operating systems and applications that stifle innovation and choice.

To the large companies, trash the Innovator’s Dilemma and innovate your respective industries. Don’t be afraid of change, embrace it (and I’m not talking about reorganization!) To the small companies, disrupt with technology and business models. Don’t be afraid of the large companies and carve out your niches. To the start-ups, go for it!
Don’t believe the naysayers whether they be analysts, VCs, or “friends” and believe in yourselves.

Here’s to innovation, disruption, and the bright future of technology!