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9/24/2010
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The Good And Bad Of Hardware-Software Appliances

Interest in appliances is growing, driven by big vendors including Oracle and IBM.

Software-plus-hardware appliances have been around for a long time, but the market for them is changing fast.

On the upside, integrated hardware-software machines are making inroads into more complex realms of data analytics, as evidenced by Oracle's successful Exadata database appliance and IBM's $1.7 billion bid for data appliance maker Netezza. On the downside, appliances delivering plug-and-play, focused capabilities, from spam filtering to WAN optimization, are being replaced in some cases by software as a service.

Bank of America wanted "stability and performance" from Exadata, says Vinod Haval, VP and manager of database products at the company. The bank has used its two Exadata appliances in production only for human resources and training database operations--far from mission-critical functions like online transaction processing. However, it's testing business intelligence uses, and Haval's seeing ad hoc queries execute 12 times faster. That's taken him from skeptic to convert.

"We have one of everything, and it's made the data center too complex," he says. "We need one solution, one architecture. From that perspective, Exadata provides the right platform for consolidating database operations."

There's a widening appreciation among IT executives for what tightly integrated hardware, applications, and operating systems can do to alter how business is conducted, through faster data analysis.

Appliances have "completely transformed the way we do information management," says Eric Williams, CIO of Catalina Marketing, a supplier of near-real-time customized promotions to supermarkets, based on its 2.2 PB of consumer data. Catalina's data warehouse lets grocery stores print coupons tailored to the customer at the checkout counter. Its data warehouse is built on 12 Netezza appliances, which let Catalina do lookups and analysis and respond with a personalized promotion in three seconds.

Catalina also is a big Oracle database user but gravitated to Netezza, which had its appliance out well before Oracle's first Exadata appliance, in 2008. If IBM's acquisition of Netezza goes through, large-scale database appliances are likely to become more common as IBM drives broader marketing. Among other market players, data warehouse software supplier Greenplum was acquired by EMC in July, and startup Aster Data just received another $30 million in late-stage funding.

Oracle customers appear open-minded to optimized software-hardware stacks. Sixty-nine percent of the 451 business technology pros who responded to a July InformationWeek survey said they'll consider them like any other option. One in five survey respondents said they'd generally avoid or flatly won't buy this way.

InformationWeek: Sept. 27, 2010 Issue To read the rest of the article, download a free PDF of InformationWeek magazine
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