San Diego’s Analytics Cluster Adds Algebraix, a Texas Transplant
As I noted in a recent post about ParAccel, there seems to be a recent proliferation of startups that are combining database management systems with sophisticated analytical capabilities.
Another one has just come to my attention: Algebraix Data Corp. is a business intelligence software company that moved its headquarters to San Diego from Austin, TX, three months ago. The startup, which was founded in 2004 as Xsprada, changed its name to Algebraix at the same time and also named its chairman, San Diegan Charlie Silver, as CEO.
“Business intelligence and analytics is probably the largest growth area in IT today,” Silver says. “It’s a very hot space. But no one can do what we do.”
I know Silver from his years as the CEO and co-founder of RealAge, a San Diego “healthy lifestyle” Internet company that uses an online questionnaire (e.g. Do you smoke?) to help consumers calculate their “real age.” Subscribers who fill out the questionnaire get a personalized plan to help them look younger and advertising-supported e-mails that provide diet and fitness tips. Hearst Magazines acquired RealAge about two years ago to strengthen the physique of Hearst’s online health and fitness offerings. While terms of the buyout were not disclosed, The New York Times estimated the deal at just under $100 million, based on RealAge’s revenue at that time of $20 million a year and 2007 Web traffic of 2.1 million unique visitors a month.
Silver says that Algebraix established its headquarters in San Diego when he took over, but the privately held company has only 12 employees, and is maintaining an office in Austin. While San Diego has a thriving cluster of analytics companies, it looks to me that it’s just more convenient for Silver.
“I am essentially the lead investor,” Silver says. “The guys pitched me years ago, when I was still running RealAge. I knew the analytics problem…and that modern databases aren’t set up these days to do deep analytics.”
The startup was founded by David L.R. Stein, a co-founder of the Gartner Group, which provides IT strategic consulting and market research services, and Chris Piedmont, a software entrepreneur and expert in XSP (Extended Set Processing) Technology. The technology they developed takes an unusual approach to organizing and retrieving data.
As Silver explains it, a conventional approach typically requires database administrators to organize, or structure, a large database so queries will run faster. The primary techniques require indexing, partitioning, pre-sorting, and pre-aggregating data to minimize the transfer of unneeded data, which is time-consuming, and to streamline other inefficiencies.
Algebraix says its proprietary software operates faster by not requiring that the data be structured before running queries. Instead, by applying advanced algebraic algorithms and parallel processing, Algebraix says its software can monitor users’ query patterns, and adaptively restructures the data while analyzing terabytes of data. Algebraix says the performance of its software ranges from 10 to 300 times faster than conventional databases and is less costly because it is designed to run with Linux or Microsoft Windows 64-bit platforms on commodity computer hardware.
The startup, which so far has been entirely funded by the founders and individual investors, got some validation when BAE Systems, the U.K. defense and aerospace giant, agreed to partner with Algebraix to develop real-time analytic platforms based on the technology.
The London-based company, which was formed with British Aerospace’s $12.7 billion buyout of GEC Marconi, has about 105,000 employees worldwide and ranks as the largest foreign-owned defense contractor in the United States. As part of the deal, BAE Systems acquired San Diego-based Marconi Electronics, reorganizing the business as its Mission Solutions business unit within its Information Systems Sector. Among other things, Mission Solutions specializes in advanced technologies used by U.S. intelligence agencies for producing and analyzing aerial photos, and by the military for planning and managing battlefield missions.
It’s a far cry from running a website to help people look and feel younger, and Silver says he doesn’t know much about Algebraix’s new partner. “The projects we work on with them are all top secret,” Silver says. He also won’t say anything to explain their partnership to co-develop “geospatial intelligence software,” saying a recent statement required the approval of “many, many, many levels at” BAE.