Entries Tagged 'M&A' ↓
December 17th, 2013 — Data management, M&A
Cumulative VC funding for Hadoop and NoSQL vendors broke through the $1bn barrier in 2013, according a Spotlight report published by 451 Research, based on data provided by The 451 M&A KnowledgeBase.
The data indicates that there was a substantial increase in funding in 2013 ($530.5m, not including RethinkDB’s $8m announced yesterday) compared to 2012 ($190.9m), thanks to major rounds for the likes of MongoDB, Pivotal, Hortonworks and DataStax.
The report includes a visualization created by 451’s Director of Data Strategy and Solutions, Barbara Peng, that illustrates the connections between the various investors and the NoSQL and Hadoop vendors in which they have invested.
A snapshot of the visualization is shown below but the the original is interactive, enabling 451 Research clients to drag the various elements around for greater emphasis, as well as isolate the NoSQL or Hadoop categories.
451 Research clients can also scroll over the blue circles to see the total amount of funding raised by the individual Hadoop and NoSQL vendors, and scroll over the smaller orange circles to see which investors have backed which companies.
The sample set was limited to 16 vendors for visual clarity, but the six Hadoop and 10 NoSQL providers cited account for more than 87% of funding to date (with Pivotal representing the vast majority of the remaining 13%).
This visualization illustrates that investment in Hadoop and NoSQL providers comes from a relatively small group of VC firms (52 to be specific, excluding individual seed investors), resulting in a relatively tightly clustered graph.
However, the visualization also enables us to put to the test the recent blog post by MarkLogic’s Adam Fowler in which he stated:
“Just look at the number of investors who are investing in multiple NoSQL companies. They’re hedging their bets because they’re not sure themselves which businesses will survive.”
In fact investment in multiple Hadoop and NoSQL vendors is relatively rare. Only 11 out of the 52 VC firms have invested in more than one Hadoop and/or NoSQL vendor, with seven of those picking one Hadoop vendor and one NoSQL provider. Less hedging their bets as picking a winner in each category.
Of the remaining four investment shops, two have invested in one Hadoop distributor, one NoSQL specialist and one Hadoop-as-a-service provider (MapR, DataStax and Qubole for Lightspeed Venture Partners; Cloudera, Couchbase and Altiscale for Accel Partners), while In-Q-Tel has invested in one Hadoop supplier, one NoSQL vendor and one NoSQL-as-a-service provider (Cloudera, MongoDB and Cloudant).
Only Sequoia Capital has invested in multiple NoSQL vendors (as well as Hadoop-as-a-service provider Altiscale) having invested in MongoDB, DataStax and – hold onto your hats, irony fans – MarkLogic. It should be noted however that Sequoia has not invested in DataStax since its series A round in late 2010.
The full report, Venture funding for Hadoop and NoSQL vendors tops $1bn is available now to 451 Research clients and also includes our perspective on when combined Hadoop and NoSQL revenue might begin to exceed combined Hadoop and NoSQL VC funding, as well as the potential for M&A and IPO activity in 2014.
January 20th, 2012 — Archiving, eDiscovery, M&A
We commented recently on Symantec’s acquisition of cloud archiving specialist LiveOffice. The announcement also afforded Big Yellow an opportunity to unveil what it calls “Intelligent Information Governance;” an over-arching theme that provides the context for some of the product-level integrations it has been working on. For example, it just announced improved integration between its Clearwell eDiscovery suite and its on-premise archive software, EnterpriseVault (stay tuned for more on this following LegalTech later this month).
There’s clearly an opportunity to go deeper than product-level ‘integration,’ however. In a blog post, Symantec VP Brian Dye raised an issue that we have been seeing for a while, especially among some of our larger end-user clients. In the post, Brian discusses the fundamental contention that all of us – from individuals to corporations to governments — face around information governance — striking the right balance between control of information and freedom of information.
Software has emerged to help us manage this contention, most typically through data loss prevention (DLP) tools – to control what data does and doesn’t leave the organization — and eDiscovery and records management tools, to control what data is retained, and for how long. Brian noted that there is an opportunity to do much more here by linking the two sides of what is in many ways the same coin, for example by sharing the classification schemes used to define and manage critical and confidential information.
This is an idea that we have discussed at length internally, with some of our larger end-user clients, and with a good few security and IM vendors. Notably, many vendors responded by telling us that, though a good idea in principle, in reality organizations are too siloed to get value from such capabilities; DLP is owned and operated by the security team, while eDiscovery is managed by legal, records management and technology teams. While some of the end-users we have discussed this with are certainly siloed to a point, they are also working to address this issue by developing a more collaborative approach, establishing cross-functional teams, and so on.
A cynic would point out that some self interest might be at play here too from a vendor perspective; why sell one integrated product to a company when you can sell them essentially the same technology twice. But of course, we’re not the remotest bit cynical (!) There is also the reality that at most large vendors, product portfolios have been put together at least in part by acquisitions. Security and e-discovery products may be sold separately because they are, in fact, separate products with little to no integration in terms of products or sales organizations. And vendors may not yet be motivated to do the hard integration work (technically, organizationally), if they are not seeing consistent enough demand from consolidated buying teams at large organizations.
Wendy Nather, Research Director of our security practice, notes that such integration is desirable;
– Users don’t WANT to have meta-thoughts about their data; they just want to get their work done, which is why it’s hard to implement a user-driven classification process for DLP or for governance. The alternative is a top-down implementation, and that would work even better with only one ‘top’ — that is, the security and legal teams working from the same integrated page.
However, Wendy also notes that such an approach is itself not without complexity;
– Confidential data can be highly contextual in nature (for example, when data samples get small enough to identify individuals, triggering HIPAA or FERPA); you need advanced analytics on top of your DLP to trigger a re-classification when this happens. Why, you might even call this Data Event Management (DEM).
It’s notable that Symantec is now starting to talk up the notion of a unified, or converged approach to data classification. Of course, it is one of the better-positioned vendors to take advantage here, given its acquisitions in both DLP (Vontu in 2007) and eDiscovery (Clearwell in 2011), while LiveOffice adds some intriguing options for doing some of this in the cloud (especially if merged with its hosted security offerings from MessageLabs).
Nonetheless, we look forward to hearing more from Symantec — and others — about progress here through 2012. Indeed, if you are attending LegalTech in New York in a couple of weeks, then our eDiscovery analyst David Horrigan would love to hear your thoughts. Additionally, senior security analyst Steve Coplan will be taking a longer look at the convergence of data management and security in his upcoming report on “The Identities of Data.”
In other words, this is a topic that we’re expending a fair amount of energy on ourselves; watch this space!
January 18th, 2012 — Archiving, eDiscovery, M&A
As if to underscore our belief that the cloud is set to play a bigger role in all things Information Management-related in 2012, Symantec announced this week that it had acquired cloud archiving specialist LiveOffice for $115m, its first acquisition in eight months (451 research clients can read the full deal-analysis report here.
Though the deal was not a huge surprise — some of LiveOffice’s executive team (including CEO and COO) hail from Symantec, which has for the last year been reselling LiveOffice, rebranded as EnterpriseVault.Cloud – it is a significant endorsement of the cloud archiving market; a sub-sector that we have been following closely for a couple of years (we published a detailed, long-form report on the market in late 2010), but has yet to really come to life.
Symantec, which of course dominates the on-premise email archiving market, notes that about half of all archive deployments now go to the cloud. In this respect, cloud archiving is a market that it simply has to participate in more directly. Accordingly, LiveOffice provides Symantec with a better means of serving the smaller organizations that tend to opt for the cloud model, which requires far fewer skills and resources to set up and manage than on-prem models. Of course, it also means Symantec doesn’t have to be religious about which model it promotes; whether on-prem, cloud or a hybrid of the two, it now caters to all requirements.
Symantec also made an interesting comment that LiveOffice is at the right point in its own development where the application of Symantec’s huge scale can help in growing the business, rather than be a hindrance. This is a refreshingly honest acknowledgement that it hasn’t always got the balance right in the past; buy a company that is too small, and the weight of a giant like Symantec risks starving it of oxygen altogether, rather than fanning the flames that made it successful in the first place.
The question now is whether this move may help spark broader growth of the cloud archiving market. LiveOffice was one of the first cloud providers to archive other data types beyond email, and can now store and index a wide variety of data, including from social media, file servers, SharePoint and even SaaS applications; as more data, workloads and applications move to the cloud, so cloud-based archiving will become more relevant. One big factor in the cloud players’ favor is that email is increasingly going the hosted route, especially for SMEs; if you run corporate email as a service, then you aren’t going to deploy an email archive on-premise.
All in all, we think this is a good move by Symantec, and one that could drive interest in the other cloud-archiving pure plays out there.
January 6th, 2012 — Content management, M&A
When SDL finally came to terms with Alterian in December, we were inspired to take a look at this and other recent acquisitions that have been done as part of the broadening of WCM into Web-experience (or customer-experience) management. Alterian brings SDL another WCM product, since Alterian acquired Mediasurface in 2008, but SDL is really after the real-time analytics and campaign management tools that are part of Alterian’s marketing automation portfolio.
It strikes us that these areas are fairly far afield from SDL’s origins in language technology and services. The deal wasn’t surprising though given how far SDL has gone into WCM. It’s not enough today though at least at the high-end of the market to be in WCM without a broader play for online marketing / marketing automation.
While there are some vendor attempts to grow web-experience management organically (Sitecore is probably most notable here), there has been a good deal of M&A inspired by bringing together WCM, web analytics, content targeting/recommendations, social and testing technologies, among others.
We’ve put together a report that reviews many of these past deals and provides some predictive analysis of M&A in this sector — available here for 451 Research subscribers.
Some forward-looking takeaways from this are:
- There are few WCM independents left to be acquired, particularly in the non-.NET camp, though there are several potential acquirers that might still want a stronger WCM component.
- CoreMedia may become a desirable target, as a rare independent with a Java codebase and high-end customers. Both SAP and IBM could pursue, though SAP seems more likely as CoreMedia is a German company and already plays the WCM part in SAP’s Web Channel Experience Management initiative.
- WCM isn’t the only field for potential targets in the name of customer-experience or even more strictly in web-experience management. Content targeting, analytics, and testing/optimization will all likely hold interest in 2012.
- It’s not just the big IT players that have a role in this consolidating landscape, though Adobe, Oracle and IBM are key players to be sure. We’ve also seen smaller players, like Norway’s eZ Systems, making small technology buys to round out their portfolios. eZ bought two companies in 2011 — YOUCHOOSE for its recommendations engine and odoscope for web analytics.
- There are lots of small technology providers in this sector, most are SaaS, and we expect there will more acquisitions like these to come.
August 18th, 2011 — Archiving, Content management, eDiscovery, M&A, Search, Text analysis
Just after the HP call about its Q3 numbers and the deal, here’s my initial (very) quick take as it’s late here in London:
- This deal is about getting serious about software under Leo Apotheker. It gives HP a real information management story, greatly boosting its presence in the archiving, e-Discovery and enterprise search businesses.
- However, company cultures are not complementary, the HP way is a long way from the hyper-aggressive sales and marketing culture at Autonomy. Maintaining Autonomy as a separate entity run by Mike Lynch proves this and calls into question how much real synergy can be had from such a structure. I cannot see that being sustained.
- This instantly makes HP a bigger e-Discovery player than IBM or any of the major IT firms.
- Product overlap exists in document and records management but gets HP into the web content management and website optimization markets.
- Autonomy has resisted deals over the years as its market capitalization ballooned as it went on its own acquisition binge. Autonomy couldn’t have waited much longer as it would have grown too big to be swallowed by even the largest predator.
- At least Autonomy customers will now have a services organization to call on after they’ve bought the software. Customer support and after sales service has not been a strength of Autonomy.
- This leaves the FTSE 100 with just one software firm of note.
July 28th, 2011 — Data management, M&A
When I was messing around with Indeed.com job trends the other day I was struck by an interesting trend relating to the five recent major M&A deals involving analytic database vendors: Netezza, Sybase, Greenplum, Vertica and Aster Data.
The trends aren’t immediately obvious from that chart, but if we break them out individually and add a black dot to indicate the approximate date of the acquisition announcement it all becomes clear.
(Note: scale varies from chart to chart)
While the acquisitions have accelerated job postings for all acquired analytic databases, Greenplum has clearly been the biggest beneficiary. Indeed.com’s data also explains why this might be: EMC/Greenplum is responsible for over 50% of the current Greenplum-related job postings on the site (excluding recruiter postings).
Greenplum had 140 employees when it was acquired in July 2010. Based on the hiring growth illustrated above, EMC’s Data Computing Products Division is set to reach 650 by the end of the year.
Netezza started with a much larger base, but IBM is expected to increase headcount at Netezza from 500 in September 2010 to a target of 800 by year-end. Thanks, no doubt, to Netezza’s larger installed base, IBM is responsible for just 7.7% of Netezza job postings.
This highlights something we recently noted in a 451 Group M&A Insight report: in order to make a considerable dent in the dominance of the big four, any acquiring company will not only have to buy a data-warehousing player but also invest in its growth.
While Vertica and Aster Data are both heading in the right direction, we believe that HP and Teradata will have to accelerate their investment in the Vertica subsidiary and the new Aster Data ‘center of excellence’ respectively.
HP recently told us headcount has grown about 40% since the acquisition (it wasn’t being specific, but Vertica reported 100 employees in January). HP/Vertica is currently responsible for 13.9% for Vertica-related job postings on Indeed.com
We had speculated that Teradata would need to similarly boost the headcount at Aster Data beyond the estimated 100 employees. Teradata/Aster Data is responsible for 24% of job postings for Aster Data.
But what of Sybase? While Sybase IQ also has a larger installed base, SAP/Sybase are responsible for just 6.4% of the Sybase IQ-related job postings on Indeed.com. The Sybase IQ chart illustrates some common sense investment advice: the value of your investment can go down as well as up.
February 8th, 2011 — Data management, M&A
The predicted consolidation of the NoSQL database landscape has begun. Membase and CouchOne have announced that they are merging to form Couchbase.
And in more interesting NoSQL news, Danish IT company Trifork has announced that it has acquired an 8% stake in Basho as part of the NoSQL vendor’s $7.4m series D round, and has become the European distributor for Riak.
The formation of Couchbase brings together to of the leading companies in the NoSQL space, and the complementary nature of the their technology and business plans highlights that the term NoSQL has been applied to many different database technologies which are being adopted for different reasons.
While Membase had focused on improving the performance of distributed applications through its Membase Server distributed database, CouchOne focused on developer interest in flexible document data stores and mobile applications, rather than performance at scale.
Additionally while Membase was focused on operational adoption with a small (albeit significant) developer community, the priority with CouchOne has been on growing adoption of Apache CouchDB, with commercial efforts only recently becoming the focus of attention.
The technology is also complementary. Couchbase will combine the Membase and CouchDB projects to form a new distributed document store project of the same name that combines the caching and clustering technology of Membase with the CouchDB document data store.
The result will be a new distributed document database covering a variety of use cases from mobile applications (Mobile Couchbase) to scalable clusters (Elastic Couchbase), with synchronization of data between the various Couchbase implementations enabled by CouchSync.
The merged company will be led by Bob Weiderhold, formerly CEO of Membase, while Damien Katz, formerly CEO of CouchOne and creator of the CouchDB database, becomes CTO.
Couchbase is claiming more than 200 customers, which would indicate phenomenal growth for both companies since the launch of their CouchOne Mobile and Membase Server products in September and October 2010 respectively.
Prior to the launch of those products they previously claimed just a handful of customers each, although CouchOne had signed up thousands of users to its free hosted services, so it had a large and willing audience ready for conversion.
Additionally the company claims millions of combined users since CouchDB has been included in every installation of the Ubuntu Linux distribution since late 2009 and Heroku (now part of Salesforce.com) offers a Membase-driven service to thousands of its hosting customers.
We previously predicted that we would see the NoSQL market both consolidate and proliferate this year, and it is worth noting that the merger of CouchOne and Membase will not result in a similar consolidation of open source projects.
While Couchbase.org can be expected to replace membase.org over time, the Couchbase project will be independent of the Apache CouchDB, which will not be impacted by the merger. Couchbase will continue to contribute to both CouchDB and also the memcached project.
While we’re on the subject of NoSQL, it is also interesting to see that Danish IT vendor Trifork has not only signed up to be European distributor of the Riak database, but has also taken a stake in Basho Technologies.
Trifork has acquired newly issued shares in Basho representing 8.35% of the company as part of its series D round, with an option to acquire an additional 3.96% at the end of Q1 2011.
November 25th, 2010 — eDiscovery, M&A, Search
I knew that as soon as I wrote my updated look on which company Autonomy might buy next something would come along to diminish the value of all my hard work. 😉 I had expected it to be an acquisition, but instead Autonomy surprised me yesterday afternoon with an announcement that after being in talks regarding an acquisition for “several months,”
Recent developments within these talks have given rise to an additional opportunity that warrants further examination which could give rise to an acquisition process that exceeds our original planned time scale.
In other words, it’s not going to happen any time soon.
As an announcement it’s a bit opaque and strangely structured, coming as the second part of an announcement that also told announced its Capital Markets Day would be on Monday, November 29.
It could mean:
- Autonomy is attempting to buy part of a business and instead is now looking to expand into another part or perhaps all of the business. For that to be the case ther first part must have been quite a small deal as Autonomy’s kitty is limited to about $1bn in total.
- Autonomy has identified a different company that it wants to buy.
- Autonomy itself has had an offer to be acquired.
This is all of course speculation. But one thing’s a bit more certain: it will probably make a dent in the company’s Q4 results, which were expected to include a boost from an acquisition that now doesn’t look like happening. Whether that means the company will miss the revised expectations it set in the Q3 call, we’ll have to wait and see.
In our report we wondered whether the company’s health care announcement, including a new product called Auminence may be used as some sort of alternative kicker in the quarter, in lieu of an acquisition. As we said, the product came out of the blue, as do many Autonomy products and appears to us to be a repackaging of IDOL with some added diagnosis checklists on top.
The shares fell 6% yesterday after the announcement came out, all of that coming late in the day as the announcement was made at 3.51pm London time. Again, that’s slightly strange timing. The shares were creeping back up this morning.
UPDATE: Autonomy clarified its statement with this Q&A:
Would it be right to interpret from today’s announcement regarding the acquisition timetable (Update on Acquisition) that the deal you are negotiating has got larger?
No, the deal remains the same size. The statement clearly refers to the timescale.
So it’s the same company, it will just take longer, which makes most sense, I guess.
October 29th, 2010 — Archiving, Data management, eDiscovery, M&A, Search, Storage
The cloud archiving market will generate around $193m in revenues in 2010, growing at a CAGR of 36% to reach $664m by 2014.
This is a key finding from a new 451 report published this week, which offers an in-depth analysis of the growing opportunity around how the cloud is being utilized to meet enterprise data retention requirements.
As well as sizing the market, the 50-page report – Cloud Archiving; A New Model for Enterprise Data Retention – details market evolution, adoption drivers and benefits, plus potential drawbacks and risks.
These issues are examined in more detail via five case studies offering real world experiences of organizations that have embraced the cloud for archiving purposes. The report also offers a comprehensive overview of the key players from a supplier perspective, with detailed profiles of cloud archive service providers, with discussion of related enabling technologies that will act as a catalyst for adoption, as well as expected future market developments.
Profiled suppliers include:
- Autonomy
- Dell
- Global Relay
- Google
- i365
- Iron Mountain
- LiveOffice
- Microsoft
- Mimecast
- Nirvanix
- Proofpoint
- SMARSH
- Sonian
- Zetta
Why a dedicated report on archiving in the cloud, you may ask? It’s a fair question, and one that we encountered internally, since archiving aging data is hardly the most dynamic-sounding application for the cloud.
However, we believe cloud archiving is an important market for a couple of reasons. First, archiving is a relatively low-risk way of leveraging cloud economics for data storage and retention, and is less affected by the performance/latency limitation that have stymied enterprise adoption of other cloud-storage applications, such as online backup. For this reason, the market is already big enough in revenue terms to sustain a good number of suppliers; a broad spectrum that spans from Internet/IT giants to tiny, VC-backed startups. It is also set to experience continued healthy growth in the coming years as adoption extends from niche, highly regulated markets (such as financial services) to more mainstream organizations. This will pull additional suppliers – including some large players — into the market through a combination of organic development and acquisition.
Second, archiving is establishing itself as a crucial ‘gateway’ application for the cloud that could encourage organizations to embrace the cloud for other IT processes. Though it is still clearly early days, innovative suppliers are looking at ways in which data stored in an archive can be leveraged in other valuable ways.
All of these issues, and more, are examined in much more detail in the report, which is available to CloudScape subscribers here and Information Management subscribers here. An executive summary and table of contents (PDF) can be found here.
Finally, the report should act as an excellent primer for those interested in knowing more about how the cloud can be leveraged to help support ediscovery processes; this will be covered in much more detail in another report to be published soon by Katey Wood.
September 20th, 2010 — Data management, M&A
No sooner had IBM announced its intention to acquire Netezza this morning than the New York Times came knocking for some perspective on the deal. There were two main questions: will anyone else bid for Netezza, and will someone now bid for Teradata.
While there is no guarantee of a 3Par-style bidding war I believe Netezza has the potential. Just last week we stated that Netezza would be the prime candidate for any firm looking to make an impact in the data-warehousing sector. In a crowded market it offers the right mix of established presence, technological differentiation and growth potential.
According to the 451 Group’s recent Information Management report, Data Warehousing: 2009-2013, Netezza is the fifth-placed data warehousing vendor, albeit some distance behind the established players. The company is predicted to deliver full-year revenue of just under $250m in 2010, in the region of 10% of the data-warehousing revenue of Oracle and IBM, but easily double the revenue of the sixth-placed vendor.
We also think rivals may see some potential to beat IBM’s offer price. As my 451 colleague Brenon Daly notes, the $27 per share purchase price represents an 80% premium against where Netezza was trading a month ago, but just 10% on the previous day’s close. Additionally, IBM is paying 6.8x projected sales which, while a relatively rich valuation, is much lower than rival EMC paid for Greenplum.
One of the reasons we think Netezza could spark a bidding war is that it is differentiated by its growth potential and established market share. It may not be in 3Par territory in terms of the scarcity of comparable rivals (we are tracking 20+ data warehousing providers), but if the likes of HP and Dell are looking to make a significant impact in data warehousing, Netezza is the prime candidate.
The other option would be to make a bid for Teradata, which delivers in market share what it lacks in growth. The company is the the largest data warehousing specialist by a considerable margin and has repositioned its product set to improve growth, so it is no surprise to see speculation that it could be the next acquisition target.
Given Teradata’s $6.2bn market cap, potential acquirers may consider there is more value in trying to outbid IBM. Either way, IBM’s bid for Netezza may not be the last bid to acquire a data warehousing player we will see this year.
One other thing – Netezza is being advised on this deal by Qatalyst Partners. No prizes for guessing who advised 3Par. Qatalyst’s other notable advisory role? The six-week bidding war that resulted in EMC acquiring Data Domain.
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