EMC's Greenplum Acquisition Invites Risk

By acquiring analytic database vendor Greenplum, EMC is conforming to a recent industry trend and looking to rub shoulders with the big boys. But in the process, EMC is moving into uncharted territory and taking a risk that it might lose more than it gains.

This isn't news anymore, but in a nutshell, EMC, a long-time leader in storage solutions, is acquiring Greenplum, a leader in massively parallel database management. This allows EMC/Greenplum to build on synergy ("Parallel Databases and Parallel Storage Solutions -- So Happy Together") and gives some semblance of a vertical stack. It also helps EMC position ahead of the likes of Netezza and Teradata and compete with industry leaders like Oracle/Exadata/Sun and IBM. And not the least, Greenplum Chorus gives EMC a strong entry into cloud computing.Overall, the acquisition provides a potentially strong addition to the marketplace, and more choice for customers. But the good news ends there.

For all the opportunity it holds, the strategy is also fraught with risk and uncertainty. For example, the solution falls well short of being a true stack -- notably missing are the operating system software and processing hardware, and EMC could find itself on paths that intersect with current and potential partners-competitors such as IBM, Microsoft and particularly Oracle, all of whom are in many ways ahead of EMC+Greenplum. Then, EMC does have significant experience with software -- which is as much an element of storage solutions as the hardware that holds the bits and bytes -- and content management, but Greenplum is software of a different nature, and the game here is very different. (Interestingly, I think Greenplum Chorus should get much quicker traction; self-service enterprise clouds storage would be right up EMC's alley.) Also, of course, there's the little matter of IBM, Microsoft, Oracle and SAP having their own business intelligence and reporting tools -- which, of course, is where much of the action really is.

An interesting question about the acquisition is: Why now? Many reasons, but quite possible the single greatest: Oracle. Oracle's acquisition of Sun has had a deep and wide impact across the industry. EMC and Oracle/Sun have a strong co-relation in corporations, and the natural concern is that with the acquisition of first Exadata and now Sun, Oracle can afford to hoof it alone (and, knowing how Oracle operates, it probably WILL fire all thrusters in that direction).

Unfortunately, history has not been particularly kind to hardware companies trying their hand at integrated software or service solutions -- HP and Dell are good examples. EMC now has a growing -- rather, sprawling -- footprint in various aspects of storage and content management, but that does not necessarily translate into expertise in data analytics -- it's hard to see the synergy between, say, Documentum and Greenplum -- and managing all this as one coherent business will likely be quite a challenge.By acquiring analytic database vendor Greenplum, EMC is conforming to a recent industry trend and looking to rub shoulders with the big boys. But in the process, EMC is moving into uncharted territory and taking a risk that it might lose more than it gains.