Netezza Chief Talks About “Formative” PTC Days, IBM Deal History, and the Future of Big Data

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800 by the end of the year. We’re in the process of doubling the Netezza sales organization. That’s the kind of investment I couldn’t make as a stand-alone public company.

X: Most tech acquisitions fail in the integration stage. What’s the plan for IBM and Netezza, and what are the challenges?

JB: IBM is a pro at this. It starts with a business plan. When they acquire a company, they have a well defined, well understood set of measurable business objectives. They expect to create a return on this investment. That’s step one. Then there are philosophical objectives—let’s not break Netezza. Let’s preserve that, keep it intact, and let’s grow it. They put a tremendous amount of energy and resources into defining how it gets integrated.

We’re heavily influenced by IBM’s business processes. They introduce one of their strongest executives—an integration and transformation executive—and pair them with me. Debbie Landers works the IBM side, and I work the Netezza side. There are thousands of issues [to discuss]. And there are integration executives for each function—engineering, sales, marketing—to help us navigate through the land of IBM.

Then there’s the accountability side—what are the problems, what are the issues, what are the hiccups. That’s reported on a regular basis. There is a culture and values executive who has interviewed senior management, done surveys, and helped people understand one another. This was an attractor back when we were considering doing this with them—they’re very focused on people. IBM is very focused on wanting to retain and motivate great people, and add great people to their company.

X: Let’s talk about the current competitive landscape in big data and analytics. There has been a lot of activity around Massachusetts in the past year, with EMC, HP, and others entering the market.

JB: When EMC acquired Greenplum, they were not a big company. Greenplum had been around for a long time and had started to find a niche in the market around high-scale, what I call queryable archive solutions. We’ve seen them playing the competitive game of cost per terabyte, a game we don’t tend to play. We tend to focus on value created through performance. They’re different applications. With EMC acquiring them, we’ve seen not a lot of change. The EMC sales force is in no way prepared to go sell these high-value data analytics solutions to their customer base. What they are prepared to do is recognize that they can exist—EMC has a very large footprint in storage—so they can see an opportunity. But the Greenplum sales force still has to come in and drive a transaction. So they’ve got a long way to go. We’ll see more of them over time. Greenplum is still out selling on non-EMC hardware, so at some point they will need to go through a major product shift.

Oracle is very active. They have been our number-one competitor since day one. They have the largest installed base in data warehousing. They are positioning their new product, Exadata, as a solution for online transaction processing, as well as for warehousing and analytics. We compete with them all the time. We have an extraordinarily high win rate in analytics. We don’t compete in online transactions. They’re putting a lot of energy and effort into developing a product that they’re positioning as all things to all people. The competitive dynamic is interesting. We like to compete based on a proof point. We want you to say, come in and prove it. We will bring our technology in and challenge the competitor, Oracle or Teradata, set it up, run it with the customer’s data and applications in the customer’s environment. We find the Exadata machine is very complex; it takes a long time to set up, tune, and provide value. With our appliance approach, you’re up and running in a day. We compete with them every single day, and we beat them handily in the analytics space.

HP—they missed the window. They’ve had a tremendous brain drain. They were failing with Neoview [data warehouse and business intelligence product]. They finally publicly terminated it. So guess what happens to all of the intelligence and knowledge around business intelligence and analytics at HP? They’re working for IBM or somebody else. HP re-announced a partnership with Microsoft around Madison to build an “appliance.” How you call this an appliance when you’re getting software support from Microsoft and hardware support from HP is beyond me. That’s a bundle, and it’s a bundle of trouble if you ask me. Because you’ve got multiple vendors to deal with. Then they go and acquire Vertica, but Vertica is smaller than Greenplum was. The talent pool is gone. HP has completely missed the boat on this.

X: So with all these giants stomping around, what are the opportunities for young startups in big data?

JB: There’s a lot of interesting stuff happening with Hadoop [an open-source platform for storing and analyzing big data]. We are seeing it become an important enterprise tool. There is opportunity to bring Hadoop to the masses, to make that technology more broadly accessible. In fact, we’re doing work with Hadoop inside the Netezza appliance today, so it’s part of our strategy as we continue to broaden.

There’s some really interesting stuff going on with open-source analytics that has the opportunity to offset some of the dominance of the big analytics vendors. We’re seeing many customers beginning to use open-source tools like R [language for statistical computing]. There are startups around it, sort of following the Red Hat [Linux] model. There’s really interesting stuff going on in solid state—SSD [solid state drive] storage is becoming important to big data. It’s still expensive and hard to maintain, and hard to build around. But it’s a really important technology and one that you’ll see us taking advantage of.

The other area in core technology that we’re seeing evolve is the use of GPUs [graphics chips] for some of the specific computational processing activities going on. There is opportunity there. Those are interesting spaces to watch.

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