In-Depth

This Just In: The Ever-Expanding DW Appliance Marketplace

Why are the majors suddenly hip to the promise of DW appliances?

• By Stephen Swoyer
• 09/05/2006

First there was NCR Corp. subsidiary Teradata, which—even though it frequently disdains the data warehouse “appliance” tag—more or less kick-started the market entire. Then, four years ago, start-up vendor Netezza Corp. threw its hat into the ring, officially launching the plug-and-play data warehouse appliance as a viable product category. Early last year, another start-up—DATAllegro Inc.—announced its own DW appliance offering, followed later that summer by IBM Corp., which announced pre-configured AIX- and Linux-based data warehousing bundles that were appliances in all but name.

That was just the beginning, of course. IBM has since fleshed out its data warehousing appliance line-up—even though it steadfastly refuses to use the “a” word (i.e., “appliance”) in its marketing collateral. In June, for example, Big Blue announced a new commodity appliance—its Data Warehousing Balanced Configuration Unit 2.1 for Linux, an IBM eServer 326m system (which can be powered by up to two dual-core 64-bit Opteron chips from Advanced Micro Devices Inc. IBM’s new appliance was its first to leverage commodity x86 hardware underpinnings—instead of Big Blue’s comparatively pricey RISC chips.

What works for Big Blue—or what appears to work for Big Blue—might work for other OEMs, too. Or so the conventional wisdom has it.

In any event, IBM isn’t the only vendor that’s gotten hip to the promise of the all-in-one DW bundle. In July, both Hewlett-Packard Co. (HP) and Sun MicroSystems Inc., separately and in collaboration with two very different software partners, announced DW appliance bundles. HP struck first, partnering with database giant Oracle Corp. to trumpet a data warehouse “reference configuration”—a bundle of server hardware, storage, and, of course software—that’s designed to get customers up and quickly DW-ing.

The HP and Oracle reference configurations are based on a sliding scale that lets customers choose between data warehouse solutions optimized for either raw performance or price performance, the partners say. They’re powered by HP Integrity and ProLiant servers, leverage HP StorageWorks disk arrays, and run Oracle 10g. What’s more, the partners said, they’re designed to scale from the modest (a single HP ProLiant server) to the high-end (HP Integrity Superdome servers running HP-UX11i)—or from 250 gigabytes to up to 10 terabytes.

“We’ve worked closely to ensure that joint customers can benefit from the high performance, reliability and scalability of Oracle Database 10g on a choice of proven HP server and storage configurations,” said Oracle VP of database product marketing Willie Hardie, in a statement. “We’re offering customers a choice of reference configurations to meet their immediate requirements and a roadmap that enables their Oracle and HP solution to grow with them.”

Sun’s DW effort is being done in tandem with open-source data management specialist Greenplum. The Sun/Greenplum Data Warehouse Appliance (DWA)—which is slated to ship sometime in Q3 of this year—is a turnkey appliance that’s based on the open-source PostgresSQL database and Sun’s Solaris 10 operating system. It outstrips the scope of the combined HP and Oracle effort, promising configurations of 10, 40, and 100 TB.

The Sun/Greenplum DWA, like similar offerings from HP and IBM, prescribes a healthy dose of Sun-branded hardware: in this case, the Unix giant’s new Opteron-powered Sun Fire X4500 data server (a dual processor system) and Sun storage, to boot. Sun and Greenplum, like rivals HP/Oracle and IBM, also promise stellar performance and scalability: The two partners say their DWA bundle can scan 1 TB of data in 60 seconds, and can scale to hundreds of terabytes of usable database capacity.

“This data warehouse appliance demonstrates the power of open-source and general purpose computing, truly driving new economics for data analysis. It will definitely make our customers and competitors sit up and take notice," said John Fowler, executive vice president of Sun’s Systems Group, in a statement. “The lightning-fast performance of this solution also makes it a snap for companies to manage ever-increasing amounts of data on their networks.”

So why have HP and Sun suddenly gotten hip to the promise of the all-in-one DW appliance? In this case, says industry veteran Mike Schiff, a principal with consultancy MAS Strategies, the most obvious explanation also happens to be the correct one: it helps them move more hardware. “Think about it: the selling point is the turn-key ease, but the turn-key ease is a consequence of [the fact that] they’re selling their own hardware and storage. In IBM’s case, everything they’re selling is their own stuff,” said Schiff, in an interview last month.

Schiff sees the moves by IBM, HP, and Sun into the DW appliance space as both a validation of that market and a challenge to entrenched vendors—especially Netezza and DATAllegro. In one sense, he concedes, Teradata—which says that its business model is premised on more than just turn-key data warehousing—is comparatively insulated against competitive pressure from the major OEMs. Although the DW appliance as a category has already eaten into—and will continue to nibble away against—Teradata’s market share, Schiff warns.

James Kobielus, a principal analyst for data management with consultancy Current Analysis, describes the recent activity in the suddenly simmering DW appliance segment in more totalizing terms. “[The interest of major OEMs] sends a signal to the DW market that low-cost, commodity-like, modular, scalable appliances will become the predominant building block[s] for addressing a broad range of enterprise requirements,” he comments, arguing that the cost of Sun-Greenplum DWA—at $15,000 per usable TB and $25,000 per usable 10 TB—is more competitive than DW offerings from the other vendors. As a result, Kobielus says, the presence of the majors could trigger a pricing war in the already fiercely contested DW appliance space: “Rival DW appliance vendors—most notably, Netezza and IBM—should strive to match Sun/Greenplum’s superior price-performance at the very low end of the DW appliance market. Rivals should bring their basic-configuration starting price down to less than $20,000 per usable TB.”