Global CIO: IBM's Most Disruptive Acquisition Of 2010 Is Netezza - InformationWeek
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2/6/2011
02:22 PM
Bob Evans
Bob Evans
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Global CIO: IBM's Most Disruptive Acquisition Of 2010 Is Netezza

The Top 10 reasons why Netezza's shaking things up inside and outside of IBM—including some tough talk for Larry Ellison and Exadata.

#6: Clarifying the role of purpose-built appliances. With a flurry of entrants into the field, CIOs should be prepared to fend off the next dopey acronyms that are sure to surface: AaaS, or "appliances as a service," and EaaA, as in "everything as an appliance." Conversely, Netezza's clarity of mission since its inception about 10 years ago will help lend some rigor to our understanding of what a purpose-built appliance is, and what it is not. Baum put it this way: "We've been a pioneer in building appliances for data warehousing—in fact we coined that term—and since our founding, that's been our core and our sole focus. At the heart of it, such an appliance provides a certain value proposition that has this as its core differentiation: not just excellent performance but also excellent price-performance and low total cost of ownership that we are able to deliver based on our promise of simplicity, ease of use, and the elimination of administrative overhead," Baum said. "We've built the company on the idea of building an appliance and on doing business like an appliance vendor, and we think that's very important because it requires that you really embrace the ideas of simplicity in your products and in your business model."

#5: Business analytics is next game-changing IT innovation. "I've felt for some time now that the next significant technology-based performance improver is business analytics," Baum said. "The technology curve with enterprise software has moved from fundamental reporting to ERP to virtualization, and all of those have been great in their times, but the the industry right now is at a place where the technology is advanced enough where the next substantial shift and game-changer that the IT world can bring to business is analytics. For us, that fits very well within IBM and its top-down Smarter Planet position and IBM's ability to really connect with customers on business-value improvement. We worked with IBM for years as a very close partner, but now we're inside that ecosystem and we have a chance to gain some incredible leverage across IBM and all of their capabilities."

#4: Further validation of the power of optimized systems. While Baum on a couple of occasions stressed that archrival Oracle's strategy is all about technology and a one-size-fits-all approach, I think Oracle—and Larry Ellison in particular—has done more than any other company to create and amplify the current buzz among customers for the potential of highly engineered and deeply integrated purpose-built systems. Oracle's gone so far as to make it the central message in the company's new branding: "Hardware and Software, Engineered to Work Together." What we are likely seeing here is a bifurcation among those optimized systems with one category typified by systems like Exadata or Teradata's high-end products, while the second grouping could become the appliance category, featuring products that are relatively less expensive and not as powerful but that also deliver the appliance-specific attributes Baum described above: simplicity of operation, minimal administration, and aggressive TCO.

#3: Exploiting data as assets from which business value is generated. "We have customers who are looking to optimize the real estate on the Internet, or their analyses of clinical healthcare trials, or smartgrids, or truck routes," Baum said. "The common thread across all of those is the concept of Big Data as the underlying enabler because in some industries we're approaching a level of technical sophistication where they can have something approaching ubiquitous data collection from all this sensing detection at the point of use—it's just exploding." For some companies, that'll just mean ever-larger storage purchases to hold all that new data, but aggressive and forward-looking companies will look at those data as a prized raw materials that, with the right analytical tools, can be mined, refined, and turned into cash. "With these vast data-gathering systems, in the best companies their data goes through their analytical systems and comes back as increasingly valuable assets from which new business value is generated," Baum said. "So for our customers, now that we're a part of IBM we're engaging with not only the technology people on simplicity and integration but also the CEO and the CFO and the revenue owners because we believe the next big wave—very big wave—of business productivity will be from analytics. And we have to be able to tell customers how to do that."

So is it time for business analytics for the masses? Here's Netezza's perspective on that:

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