LeverageInformation Community Blog

I’ve decided technology companies fit into one of two classifications. Large ones may fit into both, but specific items they sell will always fit more into one classification than the other:

“The DR Horton’s” – these are companies that sell software or hardware that’s net new infrastructure. DR Horton (DHI) is one or, if not the, largest development and construction company for single-family homes townhomes and condominiums. For example, buying a new CRM, ERP, or HR system is to me a “DR Horton” purchase.

“The Home Depot’s” – these are companies that sell software or hardware that lets you do more with the infrastructure investments you’ve already made – infrastructure renovation. Home Depot (HD) provides products and services (sound familiar?) for all your home improvement needs. For example, buying an information integration platform, BPM or MDM application is a “Home Depot” purchase.

Over the last 5 years I’ve seen a shift from companies buying “DR Horton” to buying “Home Depot.” Enterprises are investing in software and hardware, but investments designed to better leverage the infrastructure investments they’ve already made – not (as much) investments in net new infrastructure that didn’t’ exist before. You can also see this shift in market movements – net new infrastructure companies (the “DR Horton’s”) are acquiring the renovation (“Home Depot”) companies at a rapid, and increasing, pace.

Many pure-play net-new infrastructure players are becoming renovation companies. I think that this has been, and will continue to be, a great thing for the customers of these companies - the renovation technology gets highly tuned for the infrastructure leading to greater value and enhancements, especially for customers of the infrastructure offerings.

I should say that this is a very North American centric perspective. I was recently in South Africa on business and there the investments are clearly more on net new infrastructure than renovation technology.

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Fascinating how things are moving in the database appliance space.  Teradata’s announcement yesterday of entry level systems goes directly after the current cost/performance space that Netezza and others have been so actively engaged in.  Definitely a good move for Teradata.

Basically you can get into Teradata for about $67k per terabyte for a departmental data warehouse.  Increased processing power and storage space quickly brings you up to the $200k range.

Full press release:
http://www.teradata.com/t/page/180766/index.html

All in all, a great and not unexpected move from Teradata - one of the first things to happen when a market becomes more of a commodity is price pressure due to competition and a levelling off of technical capabilities.

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As part of their quarterly announcement, Informatica announced their acquisition of the Nokia subsidiary Identity Systems for $85MM USD in cash.

I expected the announcement of an acquisition but have to admit I’m surprised it wasn’t a purchase of an MDM platform vendor.

Maybe next quarter.

Filed under: Information Evolution, Metadata | No Comments »