Microsoft (MSFT) to Acquire Datallegro

Implications: - Microsoft's pending acquisition of Datallegro should allow Microsoft to better compete in very large database environments.  - As Microsoft will stop selling Datallegro's data warehouse appliances to new customer until they are integrated with Microsoft SQL Server, it may take a while to see any results.   - Microsoft's acquisition of Datallegro will likely lead to additional vendor consolidations. - Data warehouse appliances have a solid track record in very large data mart environments; they may not necessarily be ideal in mixed workload, multi-subject, enterprise data warehouse deployments.

Analysis: While the pending acquisition by Microsoft of data warehouse appliances vendor Datallegro, will provide technology that will allow Microsoft to better compete in very large analytical database environments, it does not mean that his will occur immediately. 

For example, in June of 2007 Microsoft acquired master data management vendor (MDM) Stratature and withdrew its products from the market until Microsoft could integrate them with its own technology. Although Microsoft's expected MDM offering is in the technology preview stage, over 14 months have passed and it is not yet generally available. Since Microsoft has stated that "Datallegro's products will not be sold to new customers until they are fully integrated with SQL Server," it is not clear how long they will be off the market or in what form they will reappear. Complicating the problem for Microsoft are architectural issues; Datallegro's appliances are Linux based and utilize the Ingres database, rather than Microsoft Windows and Microsoft SQL Server.

Furthermore, many of the success stories associated with data warehouse appliances actually involve very large data marts rather than enterprise data warehouses.  An enterprise data warehouse should be able to handle multiple mixed workloads, store data on multiple subjects, and handle very large data volumes. Many data warehouse appliances have found their sweet spot in very large, single subject, data marts; for example, in analyzing very large numbers of call detail records for the telecommunications industry.

It remains to be seen if Microsoft will market a data warehouse appliance on its own, or incorporate Datallegro's technology into Microsoft SQL Server.  However Microsoft utilizes Datallegro's technology, it is quite likely that the acquisition of Datallegro will lead to additional consolidation within the data warehouse industry.