Vertica and Cloud-Based Business Intelligence

May 15, 2008

The IDG news service reported on May 12, 2008, that Vertica Systems will offer business intelligence as a service. You can read the complete IDG story here. Please, navigate to it quickly, since some IDG items can become tough to locate a few days after they appear. The computing horsepower will be provided by Amazon. Vertica will use the EC2 (Elastic Compute Cloud) infrastructure introduced by Amazon in August 2006.

Vertica, another column-oriented database shop, sees an opportunity for hosted and software as a service products. Smaller firms often lack the resources to install industrial-strength business intelligence systems on premises.

The pricing for the service begins at $2,000 per month for 500 gigabytes of data. You can read the Amazon Web Services catalog entry here.

In the meantime, Amazon has worked hard to build out its Web services. I’ve heard that the company has embraced Hadoop (a Google File System variant in open source) and Xen (another open source solution). Amazon has experienced some technical hiccups but has recovered quickly.

Amazon’s putting significant effort into its Web services, and Vertica’s use of the EC2 service will be an interesting one to watch. Amazon’s cloud services have beaten Google and other firms to the punch. Although one Google source pointed out to me that Google is able to learn from Amazon’s efforts. The implication is that Google can watch and wait until the market is “right” for Google to make a move. When it comes to infrastructure investments, Amazon’s spending lags behind Google’s. Amazon also has a leaner technical team. If Google enters this sector in a major way, Amazon’s technologists will have an opportunity to demonstrate their superiority to Google’s cloud-centric engineering.

I’m going to watch the Vertica service. If successful, it may spark a strong run up for Amazon. Then Vertica will have to make the math work. A typical Vertica on premises installation costs about $125,000. So, Vertica will have to make up the difference on volume, since the cloud service is likely to generate less revenue per customer. If support and customization costs rise, Vertica may find that getting the math to work could be tricky. Meanwhile, Google watches and learns.

Stephen Arnold, May 14, 2008

Written by Stephen E. Arnold · Filed Under Enterprise, News, Online (general)

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.