Big Data Consolidation Upswing Will Place Premium on Predictive Analytics
While Big Data is hardly a new topic, the generation and storage of data resulting from the social, mobile, and local and machine-to-machine convergence trend continues unabated, justifying further investigation. That is why I’m joining my colleagues at Mooreland Partners today in launching our Big Data Monitor that takes a deep-dive into the investment and M&A opportunity within the market.
Big Data is at an interesting crossroads. Analysts are predicting continued growth while at the same time cautioning against the hype. This is actually a good thing for the market as it moves to more mainstream deployments. Experience has shown that as emerging markets (think cloud computing) go through “growing pains” and begin to mature, new opportunities emerge around innovative solutions that drive measurable results. One of the intriguing big data opportunities gaining attention are new solutions incorporating the next generation of predictive analytics technologies.
The big data consolidation wave is just beginning. The most notable acquisitions to date in the market have been of larger public companies that have repositioned technology solutions to better exploit new market opportunities, and represent scale moves for the consolidators. Leaders in the rollout of big data solutions have also been busy acquiring more targeted capabilities to round out product offerings. IBM’s acquisition of Vivisimo, VMware’s acquisition of Cetas Software, the Teradata and Aster Data deal, and EMC acquiring Greenplum (and now spinning out Pivotal with VMware) are all examples. The multiples paid on these acquisitions are reaching double-digits of revenue. As the market for big data matures, it is likely that more point solutions and best-of-breed tuck-ins will follow as the tech behemoths round out product offerings. For the first half of 2013, M&A activity around big data continued apace with acquisitions by both well-known conglomerates like Cisco and evolving players in the space like Actian.
Financing activity was been even more robust with 20 big data investments announced in the first two quarters of 2013, led by $100M raise by Applied Predictive Technologies and Hortonworks’s $50M haul. Big data investments have grown at a CAGR of 36% from 2009 through 2012, and while financing activity is on pace this year to date to match the activity of 2012, deal sizes have been bigger. In fact, at the time of this post, invested capital in the space this year has already eclipsed more than 87 percent of the total dollars invested in 2012. By Doug Gonsalves read more