Informix Buys Red Brick in Warehousing Consolidation

Informix Corp. punctuated its new commitment to data warehousing with the acquisition of industry pioneer Red Brick Systems Inc. Observers say the $35 million purchase provides a sharp example of the consolidation taking place in the data warehousing market.

"It’s just an ongoing trend," says Robert Craig, an analyst with the Hurwitz Group (Framingham, Mass.). "We’re seeing the data warehousing industry is maturing now. It’s going to start consolidating."

Red Brick, headquartered in Los Gatos, Calif., was founded in 1990 and was a popular choice among companies that were first to try data warehousing. Among its installations are some of the largest data warehouses being kept on Windows NT, including a 100 GB data warehouse at a national discount retailer.

In an electronic newsletter published by The Data Warehousing Institute, the institute’s vice president, Wayne Eckerson, credits Red Brick’s early success in data warehousing for helping draw the attention of Oracle Corp., IBM Corp., NCR Corp., Sybase Inc., Informix and Microsoft Corp. to the market space.

A commentary on the Eckerson piece by consultant Doug Hackney, president of the Enterprise Group Ltd., predicts further consolidation and little long-term optimism about Informix. "In what can be viewed only as a market share consolidation move to prolong its own chances of survival, Informix has acquired another technology that it must now integrate," Hackney says. "It is not likely that Informix, another company with fantastic technology, will be able to leverage this acquisition to climb back among the market leaders in the RDBMS segment."

In the wake of the early October acquisition announcement, Informix began briefing press and analysts on its plan for data warehousing. The strategy: seek mindshare as a performance and scalability leader, provide end-to-end solutions and expand its data warehousing consulting team. By Informix calculations, the high-end of the data warehousing market is a good place to be. "Greater than 60 percent of the money being spent on data warehousing is being spent on greater than 1-terabyte data warehouses," says Bob Walters, vice president of business development for the Data Warehousing Division at Informix.

In addition to the acquisition, which cost Informix just $12.5 million because Red Brick was sitting on $22.5 million in cash and securities, Informix has made a few other announcements. The Menlo Park, Calif., company has opened its MetaCube ROLAP tool, which requires a Windows NT server to operate, to data in Oracle databases. That version is in beta, and Informix is also working on bringing MetaCube to Red Brick, Microsoft and Sybase databases. The company also recently announced Decision FastStart, a data warehousing solution for ERP customers using Baan Co. (Reston, Va., products.

"This is not a shotgun approach. It’s not, ‘Let’s buy Red Brick. Let’s open MetaCube,’" Walters says. All of the moves follow the decision to reorganize the company, with an entire division dedicated to data warehousing. At present, the data warehousing division comprises about 100 people. Pulling in Red Brick gives the division an instant infrastructure and buys a lot of experience, provided Informix can convince Red Brick employees to migrate to Informix. Of Red Brick’s 270 current employees, Informix is trying to keep the 170 employees who hold non-administrative jobs, Walters says. While conceding that retention is always hard to predict, Walters says, "We’re very committed to Red Brick’s customers and Red Brick’s people."

Informix has promised in the short run to offer two competing lines of data warehousing technology. "We are committed to not only support but to enhance Red Brick’s Warehouse in 1999," Walters says.

Another conflict arises in the Informix Decision Frontier Solution Suite, an end-to-end data warehousing product that went into general availability in late October. Within the suite, Informix had contracted with Ardent Software Inc. (Westboro, Mass., for the data extraction, transformation and loading (ETL) component. Red Brick’s Formation, however, is also an enterprise-class ETL tool. Walters says having Formation in pocket doesn’t jeopardize the relationship with Ardent. He characterizes Ardent’s product, which Informix calls InfoMover under an OEM agreement, a robust, user-friendly product, and some power users among the suite’s customers may move up to the higher-end Formation tool if the need arises. "We are committed to Ardent indefinitely at this time," he says. "I can’t make any other statement."

One major challenge is to solve the sales/marketing difficulties that have plagued both firms in the past, Walters acknowledges. "I would merely point out that we at Informix are investing very heavily in sales and marketing, specifically in data warehousing. We fully recognize that one can have the best technology in the world and fail in the marketplace."

Ted Schadler, an analyst with Forrester Research Inc. (Cambridge, Mass.), says the Informix-Red Brick combination is flawed because neither is strong in the direction the market seems to be moving -- packaged data marts, personal data cubes and infrastructure.

"[It’s] a fine deal, but not one to make us jump up and down and go, ‘Rah, rah. Fantastic stuff,’" Schadler says. "These are both kind of fossils at this point. There’s not a lot of warm, good, happy feelings about putting together two technologies that are behind the curve."