For a long time, data warehousing on a terabyte scale has been the preserve of the largest and wealthiest corporations – retailers, telecoms companies, banks. The reason is simple – cost.
Customers of the high-end data warehousing vendors – NCR’s Teradata, IBM and Oracle – typically spend more than $1 million a year with their supplier just on upgrades and maintenance. Initial purchase prices reaching into eight figures are not uncommon. The technologists justify that not just by the value that their products deliver, but the cost of developing the algorithms, the parallel hardware and the proprietary database engines that drive the data analysis.
However, two start-ups – Netezza and DATAllegro – are challenging that status quo with a proposition that chills the old guard and intrigues customers: affordable data warehousing appliances.
Netezza brags that its data warehousing appliance is 10 to 50 times faster than anything else on the market, yet the box costs half as much. Costs are kept low by leveraging commodity hardware (standard processor units and storage) and adapting ‘free’ software such as the Linux operating system and the open source PostgreSQL database.
“Netezza’s sweet spot is large, high-end database systems, like credit prospecting systems,” says Eric Schmitt, an analyst at Forrester Research. “More importantly,” he adds, “Netezza’s appliance approach requires significantly less care and feeding than standard relational databases, thereby decreasing total cost of ownership.”
Stephen Brobst, CTO at Teradata, dismisses the new products as “vast, cheap scanning boxes” targeted at the enterprise data mart space, and not designed for complex analytics. Nevertheless, in just three years Netezza has built up a list of customers which includes Amazon.com, Cingular Wireless, CNET Networks and Orange UK. As a result, year-old DATAllegro, which is run by Stuart Frost, the founder of Select Software, finds itself addressing a market already ‘educated’.
After a decade of fixed battle-lines, such competition suggests the warehousing market is about to be come a much more dynamic and volatile place.