It's official. After months of speculation, last night SAP executives told CMSWire that it completed its acquisition of Palo Alto, Calif.-based Big Data-as-a-Service (BDaaS) provider Altiscale. The deal closed on Sept. 1.
Big Data the Enterprise Can Depend On
While the financial terms of the deal were not disclosed, the motivation behind the acquisition was: Walldorf, Germany-based SAP wants to provide enterprise customers with the same caliber of big data-crunching and analytics capabilities that internet giants like Yahoo, Amazon, Google and others enjoy, and do it in a way that enterprises can depend on.
This according to Mike Eacrett, vice president of product development, Big Data at SAP.
Despite all of the hype surrounding big data in the enterprise, most companies don't have many successes to point to. According to Gartner analyst Merv Adrian, only 15 percent of surveyed businesses report deploying big data projects to production.
Experts cite everything from improper goal setting, to shortage of skilled resources, to time to value, to lack of trust as reasons for abandonment. And while these excuses may all be valid, it could be that it simply takes too long and requires too much expertise to get going with big data and that the payoff never lives up to the expectations or efforts.
@merv @Barnes_Hank The slower the better. Too much hype. Strategic, not tactical.— David W. Locke (@DavidWLocke) September 22, 2016
Altiscale's 'Big Data Dial Tone'
This is the dilemma that Altiscale set out to solve when the company was founded in 2013. At the time, founder Raymie Stata likened his service to a "big data dial tone" created for the "vast majority of companies who will not be able to build and run it (enterprise grade, elastic) Hadoop on their own, so that they too can participate in the transformations ahead."
Unlike the “Hadoop in the Cloud” or “Spark in the Cloud” or “Analytics in the Cloud” solutions offered by other vendors, Altiscale provides what Eacrett called big data as a managed service. This difference matters, because in order to do big data like Yahoo, Google, and Facebook in the enterprise you need instant access to incredibly talented engineers, a perfectly tuned cloud infrastructure that is there whenever and at whatever scale you need it, and at a price that makes sense.
"That's Altiscale," Kevin Leong, vice president of product marketing at Altiscale told CMSWire, noting that Altiscale engineers gained their expertise building Hadoop, Spark, Cloud and Analytics services at companies like Yahoo, Google, Cloudera, Hortonworks, LinkedIn and Databricks, among others.
The company's employees cut their teeth managing and gleaning value from terabytes and petabytes of data. They know what it takes to deliver on SLA's that the enterprises demand.
Why SAP & Altiscale Makes Sense
SAP, for its part, already has a host of data products, including market disruptor SAP HANA and SAP HANA Vora which together with Altiscale will complete its big data play. When Constellation Research analyst Doug Henschen first heard a rumor around Altiscale's acquisition, he wrote, that "Altiscale would enable SAP to help customers with high-scale data capacity and data pipelines without relying on third-party vendors."
"If this deal is real, I think it will be a boon to SAP," he noted in a blog post.
Don't forget that SAP has things to offer to Altiscale as well.
Aside from the investment needed to keep building and improving on its BDaaS products and services, SAP has infrastructure in places like Europe and access to relationships with CEOs and CIOs that have been nurtured over decades.
With 300,000 customers in 190 countries, 95 million cloud users and 74 percent of business transactions touching an SAP system, SAP's dominance of the enterprise and the confidence it has won from CIOs is largely indisputable. Altiscale should be able to lean on that to win customers and to dominate the BDaaS market.
According to Leong the relationship offers even more, noting the inspirational meetings between SAP and Altiscale employees.
"We talk about what we can do and how much we can do," he said, adding that Altiscale is going to innovate not only internally but in SAP's cloud and its applications as well.
"We're looking at integrating Altiscale with SAP Hybris, Success Factors, SAP Analytics, Siemens IoT and others, in areas like CRM, Ad Tech and Marketing Analytics (multi-channel analytics and advertising attribution) ERP and others," said Eacrett.
One of the big questions industry watchers will undoubtedly have is whether Altiscale's very talented employees will stick around.
"Now is the time that we, and our founders, will get to see our vision become real," said Leong, insisting that he wasn't about to go anywhere anytime soon.
Editor's Note: The article was updated to reflect that SAP completed the deal.
Title image by MichaelBr90 CC BY 3.0 license