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Friday, September 11, 2009
Big competitors spark Netezza’s partner-friendly strategy
By Rodney H. Brown
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Facing serious competition from tech giants for the first time, Netezza Corp. has changed its technology, hoping the strategy allows it to expand its reach by working more closely with partners.
Since Marlborough-based Netezza (NYSE: NZ) launched in 2003, it has been the largest player in the data warehouse appliance field, making a hardware box that speeds up analysis of large databases based on the products from the two biggest database companies in the world — Microsoft Corp. with its SQL Server product and Oracle Corp. with its numbered releases, now at Oracle 11g.
But last year, Oracle announced it had a database warehouse appliance of its own based on a similar architecture to Netezza’s. Also last year, Microsoft bought its way into the space, acquiring DATAllegro Inc.
Last week, Netezza held the Boston event in its rolling roadshow to hype its new appliance, TwinFin. Unlike previous versions of its refrigerator-sized appliance, TwinFin is based on industry-standard, Intel Corp.-based blade server technology. Using well-known tech in TwinFin will allow Netezza’s partners to more easily code specific applications for their clients using the new box. And that will open up a whole new world of uses for Netezza’s tech, company officials hope.
“As we expand and grow, and we look for additional opportunities in the market, we know that we need to go closer to the business,” said James Baum, president and CEO of Netezza.
Getting closer to the end user is a significant change for Netezza. Previously, the company would identify and market to corporations that had to deal with many terabytes worth of stored data, assuming that they had some sort of analysis need Netezza’s box could help with. But they didn’t make the actual analysis applications.
“It’s a little bit like BASF — we don’t make business analytics, we make business analytics better,” Baum said.
That strategy worked well for Netezza, allowing the company to go public in July of 2007 and build to about 500 employees. One hurdle to greater growth, however, was the proprietary nature of Netezza’s technology. The box was based on PowerPC processors, not the more common Intel chips, and coding applications for it required a writing in a specific Netezza coding language, according to database analyst Curt Monash of Acton-based Monash Information Services.
“When they first started to get partners, they said, ‘We have a funky language and we have something like a C compiler so you can write code in C and run it on Netezza,” Monash said. “They didn’t get a lot of significant partnerships based on that.”
The pressure from having powerhouses like Microsoft and Oracle starting playing in a company’s sandbox is being felt by Netezza and to some extent driving its new strategy.
“That is absolutely in response to having some of the world’s worst and ugliest competitors to deal with,” said Tim Young, Netezza’s vice president of corporate marketing.
This new technology already seems to be paying off for Netezza. At Netezza’s Enzee Universe event last week, business analytics giant SAS Institute Inc. announced a closer partnership with Netezza, and Monash said TwinFin helped seal the deal.
“Absolutely SAS waited for this to implement the partnership they announced,” Monash said.
The recent changes have led to a great deal of speculation that Netezza is now a real target for acquisition, with IBM Corp. noted as the top contender. Baum, however, downplayed the possibility.
“It’s not at all part of our strategy,” he said. “We’re trying to build a standalone company that defines the landscape around business analytics.”
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