Monday, October 16, 2006

Netezza Data Warehouse Appliance Blue Ocean

I have been reading Blue Ocean Strategy by Kim and Mauborgne, and wanted to share yet another example of this concept in the data warehousing industry. It has to do with a disruptive business model called the data warehouse appliance model first developed by Netezza Corporation. Although this concept is probably not new to anyone in the warehousing space, and there are at least 2 others trying to play in this space now with different technology, it is still a great illustration of a blue ocean, and one that Netezza continues to push the envelope on.

Note: Although the high end data warehouse space, Oracle is not really considered in the same league, I have added them for comparison since they have such high penetration in data shops.

The following is what I consider to be a reasonably close strategy canvas for Netezza.
The following are my thoughts on value proposition factors and short descriptions as to why Netezza stands out.

Price - The price customers will pay for a roughly equivalent system: Netezza has developed a way to bring the scale and performance at a much lower cost making it much more feasible for companies that do analytical heavy lifting that used to require a much more expensive alternative.
Scale - Data volume that the system can handle: Netezza is still proving themselves in the area of very large data sets, however their systems are proving that they can scale to the likes of Teradata, and maintain performance
Performance - Query performance on unstructured questions/queries: In benchmarks Netezza has been shown to outperform all equivalent RDBMS vendors (sometimes by 10-100 times) and has even shown performance equivalent and wins over Teradata.
Features - The feature set included to build applications: Although Netezza probably doesn't have the complete feature set of its competitors, it has all the key features needed to build a highly functional data warehouse (eg - materialized views). They are specifically built for high performance data warehouses.
Simplicity - The number of FTE's and skill to set up, support, tune for performance etc: Netezza is called an appliance, because of a customers ability to plug it in and be up and running (well within a few days), as compared to a much longer time frame with competitors. Also, the system architecture and intelligence almost eliminate the need for tuning. Due to this appliance model this reduces the need for support FTE, and skills required, freeing up DBA's to do actual data analysis work instead of always needing to monkey with the engine.
Customer Service - The skill level and quality of customer support: Considered superior at Netezza. They do not hire low end customer support staff - rather, their customer support seems to consist of seasoned database resources with DBA and database developer knowledge. This may make for a more expensive CS team, but it is a small price to pay for reference-ability with existing customers.

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