DATA-Beat A DATAllegro Blog on Data Warehouse Appliances

By the time you read this blog, Microsoft will have announced the acquisition of DATAllegro at their financial analyst meeting in Seattle. Read press release here

On a personal level, this marks the successful end of a twenty year journey building start-up companies. My first startup went through a very successful IPO, but didn't end well for me emotionally or financially. After taking a bit of time off to lick my wounds, I found myself trying to find funding for a startup in the 2000-2002 period - which wasn't much fun! But then, just as the VC community started to recover from the Internet 'bubble' in 2003, I came up with the vision for DATAllegro. Since that time, we've raised just under $65m in venture capital and created a hugely successful exit for my investors, my great team and last, but not least, me!

One of the things that pushed me towards the data warehouse market as an attractive target for a startup was its sheer size (over $20bn for hardware and software) and its importance to the major software and systems vendors. Due to a lack of interest from VCs in the Nineties, the database market in general had been pretty stagnant for 10-15 years. However, this was starting to change with the advent of some pretty decent open source DBMSs that we could use as a starting point. When put together, I felt these characteristics made the market ripe for disruption - and ultimately a successful exit via acquisition by one of the major vendors.

Given these market dynamics, it made sense to ensure our architecture was flexible and portable to any of the major database engines out there. This made us a very attractive target for Microsoft.

I started out this blog entry by saying this represents a successful exit for me and my team here at DATAllegro. Actually, that's not quite true. Yes, it's very successful financially and extremely satisfying professionally, but it's not really an exit. I'm intrigued by the opportunity to put the Microsoft brand and access to the market behind the vision, technology and people of DATAllegro. I've also found the people at Microsoft to be very intelligent, thoughtful and great to work with. Over the last few years, it's been incredibly frustrating to have prospects tell us that we have the best technology, vision and people, but that they can't buy from a startup - I think that will change radically under the Microsoft brand! As a result, I'm starting to think that it could be a long term home for me. It will certainly make a nice change from having to raise VC money every few months!

As soon as the acquisition closes, we'll start the work of moving our technology from Ingres & Linux to SQL Server and Windows. Our feasibility studies over the last few months indicate that SQL Server is a significant improvement in terms of performance - especially in key areas such as star joins, I/O throughput and in-memory operations. The engineering team here at DATAllegro is VERY excited about the next version of the product. Curt Monash provides some insightful analysis on the move to SQL Server in his blog as does William McKnight.

It will be interesting to see the impact this acquisition has on the rest of the market. Again, Curt provides some interesting thoughts as does Philip Howard. My guess is that the other incumbents will scramble to respond to Microsoft's pre-emptive strike and that this could lead to a few of the other startups being acquired. The ones left out will find life very hard over the next few years. I'll comment on this area more once things settle down a little.

So far we've had a great response to the acquisition from analysts, customers and the people here at DATAllegro. It will be fascinating to see how all this plays out over the next few years.