Microsoft to buy datawarehouse appliance vendor

Datallegro to be acquired

Microsoft is to buy DATAllegro, a privately held maker of data-warehouse appliances.

The terms of the deal, which comes on the heels of one announced last month to purchase data-quality technology vendor Zoomix, were not disclosed. Microsoft will retain most of the 93 DATAllegro employees.

DATAllegro provides datawarehouse appliances, which combine data storage functions with business analytics software. According to the company, its appliances allow users to rapidly query large volumes of data. They have the flexibility and scalability enterprises need, but at a cost-effective price, according to DATAllegro.

The acquisition will allow Microsoft to "compete with the highest-end enterprise data-warehousing solutions," says Bob Muglia, senior vice president of Microsoft’s server and tools business. "It will scale well beyond what Oracle can do today," he says.

Microsoft plans to use DATAllegro's technology to extend the capabilities of SQL Server for enterprise customers, making it easier and more cost-effective for them to manage and mine data.

However, Microsoft may run into some challenges when integrating DATAllegro's technology with SQL Server. One technical challenge will be to replace the open-source Ingres database that DATAllegro's appliance is based on, says Forrester analyst James Kobielus in a research note.

Another hurdle will be to convince customers to use SQL Server in favour of Ingres, Kobielus wrote. "Clearly, that migration to SQL Server may alienate a substantial portion of DATAllegro’s existing customer base," he says, adding that it also will likely raise the price of Microsoft's version of DATAllegro's appliance.

However, on the plus side, Microsoft will provide what "DATAllegro has most critically lacked —global sales, marketing and support — "in spades," he says.

Muglia says an offering based on DATAllegro will be proof of Microsoft’s commitment to meet enterprises' high-end data-warehousing requirements at a competitive price.

Managing and getting relative business intelligence from data has always been a problem for business customers, particularly large comapnies, and customers long have used data warehouses to store and manage large quantities of data.

The datawarehouse appliance market, which combines storage and management with analytics, has been growing over the past several years because it provides an all-in-one package, Kobielus says.

"Over the past several years, the DW [datawarehouse] appliance — a preconfigured, pre-optimised bundle of hardware and software components — has become the predominant go-to-market approach among both established and start-up DW solution providers," he says.

Nancy Gohring contributed to this report

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