EMC buys Greenplum

Today EMC announced the acquisition of Greenplum, the San Mateo-based Data Warehousing appliance company. The all-cash transaction price is not disclosed yet. This is an interesting move by EMC and it makes a ton of sense.

Greenplum was started by two LA guys (I know Scott Yara, the co-founder) back in 2003. I remember discussing Greenplum’s technology and business model with Scott around 2004-2005 time. The intent was to take an open source database engine like Postgres and do a highly scalable implementation on x86 servers, providing scale-out model with massively parallel processing.  The other idea was to blend this into hardware as an appliance, to ease the administration burden and lower cost (self-service). So Greenplum zeroed in on Sun servers and a combo-appliance. They even brought in a Sun executive to be their CEO. The secret sauce came from massively scale-out algorithm using virtualization schemes.  This structure will fit well in the cloud computing model.

Now that Sun is Oracle which has Exadata as a competing technology, Greenplum’s  close link with Sun will not last long. Hence this EMC deal makes sense. EMC being in the storage business has been trying to move up the value chain. It has acquired several companies including Data Domain last year. But this one is special in taking EMC right in competition with software vendors like Oracle, Teradata, IBM, and Netezza. The closest one to Greenplum’s approach is probably Netezza , which has done well in “vertical industry analytics” space. For example, industries like telecommunication (CDR – Call Detail Records) or retail (Walmart’s huge deployment of Teredata for analytics) are ideally suited for such appliances where data growth can be massive and current implementations are very expensive.

Given the projected growth of data, this acquisition makes much more sense than EMC buying Documentum a few years back (I still have a hard time understanding that one).

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