Posted on July 25th, 2008 by Tasso Argyros

Stuart announced yesterday that Microsoft has agreed to acquire DATAllegro. It is pretty clear Stuart and his team have worked hard for this day: it is heartening to see that hard work gets rewarded sooner or later. Congratulations, DATAllegro!

Microsoft is clearly acquiring DATAllegro for its technology. Indeed, Stuart says that DATAllegro will start porting away from Ingres to SQL Server once the acquisition completes. Microsoft’s plan is to provide a separate offering from its traditional SQL Server Clustering.

In effect, this event provides a second admission from a traditional database vendor that OLTP databases are not up to the task for large-scale analytics. The first admission was in 1990s when Sybase (ironically, originator of SQL Server code base) offered Sybase IQ as a separate product from its OLTP offering.

The market already knew this fact: the key point here is that Microsoft is waking up to the realization.

A corollary is that it must have been really difficult for Microsoft SQL Server division to scale SQL Server for larger scale deployments. Clearly, Microsoft is an engineering shop and the effort of integrating alien technology into their SQL Server code-base must have been carefully evaluated for a build-vs-buy decision. The buy decision is a tacit admission that it is incredibly hard to scale their SQL Server offering with its roots in traditional OLTP database.

We can expect Oracle, IBM, and HP to have similar problems in scaling their 1980s code-base for the needs of data-scale and query-workloads of today’s data warehousing systems. Will the market wait for Oracle, IBM, and HP’s efforts to scale to come to fruition? Or will Oracle, IBM, and HP soon acquire companies to improve their own scalability?

It is interesting to note that DATAllegro will be moving to an all-Microsoft platform. The acquisition could also be read as a defensive move by Microsoft. All of the large-scale data warehouse offerings today are based on Unix variants (Unix/Linux/Solaris), thus leading to the uncomfortable situation at some all-Microsoft shops who chose to run Unix-based data warehouse offerings because SQL Server would not scale. Microsoft needed an offering that could preserve their enterprise-wide customers on Microsoft platforms.

Finally, there is a difference in philosophy between Microsoft’s and DATAllegro’s product offerings. Microsoft SQLServer has sought to cater to the lower end of the BI spectrum; DATAllegro has actively courted the higher end. Correspondingly, DATAllegro uses powerful servers, fast storage, and expensive interconnect to deliver a solution. Microsoft SQL Server has sought to deliver a solution at a much lower cost. We can only wait and watch: will the algorithms of one philosophy work well in the infrastructure of the other?

At Aster Data Systems, we believe that the market dynamics will not change as a result of this acquisition: companies will want the best solutions to derive the most value from data. In the last decade, Internet changed the world and old-market behemoths could not translate their might into the new market. In this decade, Data will produce a similar disruption.

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