Post-Acquisition, EMC/Greenplum Questions Answered

EMC’s release last month of its first post-Greenplum deliverable -- the EMC Greenplum Data Compute Appliance -- helped answer a few lingering questions.

Unlike IBM Corp.'s acquisition of Netezza Inc. -- which industry watchers endorsed on multiple levels -- EMC Corp.'s purchase of analytic database specialist Greenplum Software Inc. was less intuitive.

Viewed in the context of Big Blue's multi-billion acquisition of Netezza, EMC's Greenplum purchase even seemed puzzling to many. After all, EMC isn't a big database company. It doesn't have any stake in business intelligence (BI), data warehousing (DW), analytics, or data integration (DI). It doesn't even have a services division comparable in either scope or ambition to Big Blue's Global Services unit.

So why did EMC acquire a seminal analytic database player? More to the point, why did it gobble up a columnar analytic database player? Thanks to its columnar architecture, after all, Greenplum's database can more efficiently compress data -- fitting more data into a given storage capacity -- than can conventional offerings from Netezza, Dataupia Inc., and other vendors.

From EMC's perspective, it would seem that a Greenplum-based appliance will consume, on average, less storage than a Dataupia-based appliance. What was EMC thinking?

EMC's release last month of its first post-acquisition deliverable, the EMC Greenplum Data Computing Appliance, helps answer that question. The new EMC product puts the "Big" in Big Data: it can support up to 864 TB of uncompressed (and up to 5 PB of compressed) data, distributed across 24 racks. That's high end even by high-end DW standards.

Considering that Greenplum's columnar architecture is at odds with EMC's best interests, the Greenplum database neatly positions EMC in the developing Big Data stakes. Believe it or not, argued industry veteran Merv Adrian, a principal with IT Market Strategy, in the immediate aftermath of the acquisition, EMC wins even if it ends up selling less storage with a columnar product such as Greenplum than it would have sold with a non-columnar offering -- for example, Dataupia.

"This may seem counterintuitive for a storage vendor, but Greenplum's columnar storage capability means it can help its customers use less storage," conceded Adrian. "Is this a problem?" he asked, concluding that an EMC-backed Greenplum appliance "will fill up as fast as customers realize they can keep a years' worth for analysis instead of three months' worth. Expanding use cases will sell more storage, not less."

Storage, moreover, is the sine qua non of high-end DW -- especially of the kind of triple-digit-terabyte DW championed by Greenplum, Netezza, Oracle, Teradata Corp., and other members of the high-end DW group.

Greenplum recently upped the ante, touting its vision of an enterprise data cloud – which consists of an "elastic" environment in which new analytic projects are provisioned or de-provisioned according to changing business requirements -- that likely places an additional premium on storage.

Clearly, EMC tapped Greenplum to form the foundation of its nascent Data Computing Division. According to industry veteran David Hill, a principal with consultancy Mesabi Group, EMC has grown the personnel footprint of its Data Computing Division by 30 percent since it first announced its intent to acquire Greenplum in July.

Hill believes the EMC/Greenplum combination bears watching. He points to EMC's generally successful track record, vis-à-vis its many acquisitions, which include virtualization powerhouse VMWare Inc. and information security stalwart RSA Data Security.

In both the VMWare and RSA acquisitions, the immediate upside for EMC wasn't entirely obvious. In both cases, EMC was able to leverage its new acquisitions to diversify its portfolio -- and to sell more storage.

Hill likewise expects EMC to sell a lot of storage via its new Greenplum-based Data Compute Division. "For years now EMC has proven to have a green thumb when it comes to acquisitions. That is reflected not only in the acquired company itself … but also in how successfully [EMC] helps its acquisitions achieve a growth potential that they would not have been able to reach on their own," he writes.

"The process has tended to be easier when EMC acquired leaders in the field such as VMware and RSA which did not face the same degree of competition as there is in data warehousing," he concedes. "If EMC can prevail in the face of such fierce, well-funded efforts by competitors, then Greenplum will provide a rich harvest for EMC's information infrastructure strategy."