Vertica Acquisition by HP Signals a Business Intelligence Battle in the Bay State

2/14/11Follow @gthuang

Don’t look now, but there’s a “big data” war brewing in our backyard—one that involves several technology giants.

Vertica, a database management and analytics software company based in Billerica, MA, confirmed today it is being acquired by Hewlett-Packard (NYSE: HPQ). Financial terms of the deal haven’t been released, but I’m hearing that the price could be more than $200 million. Palo Alto, CA-based HP expects the acquisition to close in the second quarter of its fiscal year 2011.

The deal goes to show that IBM isn’t the only big company interested in scooping up Boston-area business intelligence software firms. Vertica has been the subject of acquisition rumors since at least last fall; the word on the street was that Oracle and HP would be the most likely suitors. Hopkinton, MA-based data storage giant EMC (NYSE: EMC) recently strengthened its database and business intelligence offerings by acquiring California-based Greenplum last summer. Meanwhile, IBM has been on an acquisition tear in Massachusetts, having bought some 18 area companies since 2003, including business intelligence and analytics firms Cognos, Guardium, Unica, and, most significantly, Netezza. (IBM buying Netezza probably accelerated the HP-Vertica deal.)

The tech giants are all fighting over technologies and platforms for making sense of huge amounts of data (in the Internet cloud and elsewhere)—so that companies that buy their products can glean business insights in real time and, presumably, make a lot more money. HP, which calls itself the world’s largest technology company, has generally been less acquisitive than some of its competitors in the sector—which means it also has less experience integrating companies. Today’s news might signal a change in that strategy.

Vertica was founded in 2005 and specializes in databases that store numbers in columns rather than rows, which speeds retrieval in many data mining applications. The company is led by CEO Christopher Lynch, who succeeded former CEO Ralph Breslauer last April. The firm’s customers include Groupon, Twitter, Verizon, AOL, Zynga, Playdom, Bank of America, BlueCross BlueShield, and Comcast. Its revenue growth has been very strong. Vertica has raised in the neighborhood of $30 million from the likes of Highland Capital Partners, Bessemer Venture Partners, and Kleiner Perkins Caufield & Byers. If the acquisition price is indeed more than $200 million, the deal is a nice win for Vertica’s investors; the question remains, however, whether the company might have sold out too early.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • http://dashboardspy.com Hubert Lee

    Fascinating. We’ve seen this consolidation and acquisition pattern before of small regional software companies by the big boys such as IBM of course, but still very interesting. ESPECIALLY when you are an employee of one of the acquired firms. Interesting times!

  • tex

    whos next to get gobbled up ? sand technology look like an interesting candidate, they would benefit from the investment that an acquisition would bring, seem to have plenty of big name customers TESCO t-mobile

    current market cap is miniscule, they seemed to have divested some project to informatica for a few million recently

    any other candidates?

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