Pentaho Acquisition a Sign of Major Changes in Data Integration

Loraine Lawson
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The Challenges of Gaining Useful Insight into Data

It’s official: Pentaho is now an independent subsidiary of Hitachi Data Systems Corporation. The acquisition is less interesting, though, than the reasons behind it.

This deal is solidly about the emerging Internet of Things analytics market, which is expected to be worth $502.1 million this year but grow to $1,955.7 million by 2020. HDS wants to be a global leader in the Internet of Things, particularly in the related fields of operational technology and machine-to-machine analytics.

Pentaho began as an open source data integration company back in 2004, and those open source roots likely played a key role in Hitachi’s interest.

“By choosing an open source technology for this purpose, Hitachi Data Systems could lower the cost of deployment for its vast ecosystem,” wrote Forbes columnist Dan Woods when the acquisition was first announced. “Hitachi Data Systems customers can extend the systems they get without having to have created a commercial vendor relationship as a first step.”

Pentaho also offers analytics and visualization tools. HDS will leverage those capabilities to accelerate its Social Innovation vision and IoT product roadmap.

“Their data analytics, visualization and integration platform is an integral part of our advanced analytics foundation, which is the engine that powers Hitachi Social Innovation solutions,” said Kevin Eggleston, senior vice president of Social Innovation at HDS.

Pentaho’s CEO Quentin Gallivan will now report to Eggleston, although Pentaho will continue to operate independently as “Pentaho, a Hitachi Data Systems company.”

Woods wrote that the deal highlights the “growing importance of technology to support data supply chains.” But it also highlights another trend: Integration will be a critical component to making the Internet of Things usable.

“IoT isn’t just about ‘big’ data – it’s also about small data that drives big outcomes,” Vernon Turner, IDC senior vice president of Enterprise Systems and IDC Fellow for the Internet of Things, said in a statement this week. “Hitachi Data Systems recognizes that distinction, and is building a robust analytics framework that uniquely combines Hitachi’s formidable industrial, societal and business expertise with its rich portfolio of data infrastructure and analytics solutions. The Pentaho platform provides a key unifying element that complements HDS’ OT and IT heritage and will pave the way for new innovations in the company’s IoT, analytics, and Social Innovation solution portfolios.”

I suspect IoT support is no small factor in Pentaho’s recent move to integrate with Apache Spark, an open source data processing engine that uses in-memory technology to provide super fast analysis of Big Data. Spark also can handle streaming data, another key component for using sensor data.

It’s perhaps also worth noting that we owe the term “data lakes” to Pentaho’s co-founder and CTO, James Dixon. This deal is noteworthy, though, for another reason: Pentaho’s buyout is another indication that the enterprise integration market is shrinking. Talend CEO Mike Tuchen remarked on the significance of this upheaval after Informatica’s recent acquisition.

“What we’re seeing is a once-in-a-generation redefinition of the entire data-management stack,” Tuchen told eWeek. “A growing number of companies are migrating away from legacy, premise-based integration software sold on a license basis to more agile and modern solutions optimized for Hadoop and big data, open source, and the cloud.”

Talend, by the way, was the first open source data integration vendor to rank in Gartner’s magic quadrant and is often cited as a major competitor for Pentaho.

Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.

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Nov 24, 2015 4:47 AM Stella James Stella James  says:
What an interesting article, thank you for sharing. Reply

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