Internet & Technology

Monday, June 13, 2005

Startup Netezza Claims Some Speed Records In Data Warehousing

Privately held Netezza's product resembles a black refrigerator. It's officially called the Netezza Performance Server System.

The product combines cheap hardware with open-source software to perform data queries at blazing speeds, thanks to pioneering technology. Companies use it to scour reams of data to reveal business trends.

Netezza released its appliance in 2003. But as an upstart, it's taken two years to build momentum. Its footing firmed up last month, when Amazon.com (AMZN) said it's deployed the system to assess the habits of its online shoppers.

The firm claims other big-name customers, including Cingular Wireless and CNet Networks. (CNET)

Netezza's claim to fame is the way it gets to data. Most systems first must transfer large amounts of data over networks in order to be processed. Netezza's breakthrough puts the data processing functions right next to disk drives that store data. This approach cuts down on data transfer times, thus providing faster queries.

The company can deliver queries 10 to 50 times faster than existing systems, says Jit Saxena, chief executive of Netezza.

"Our architecture provides a deceptive value proposition in terms of performance," Saxena said. "You can call what we're doing disruptive."

Framingham, Mass.-based Netezza is a high-tech David slinging its appliance at the Goliaths of data warehousing.

The giants it faces in this industry include Oracle, (ORCL) IBM (IBM) and the Teradata unit of NCR. (NCR)

Standard data warehouses combine database software with hardware for servers and storage disks. Netezza's innovation involves the way in which it reads the data, says Dan Vesset, an analyst with research firm International Data Corp.

"Netezza is still reading disks of data," he said. "But they're doing it more efficiently, with multiple disk heads reading multiple disks in parallel at the same time."

At a starting price around $300,000, Netezza could be a low-cost choice for many drug makers and telecom firms that process massive amounts of data, says Vesset. He says the system needs fewer database managers, which is another plus.

"Basically, you just plug it in and it runs," he said. "You only have to check on it every couple of weeks."

Netezza was founded in 2000. It's received $68 million in venture funding. Backers include Matrix Partners and Sequoia Capital.

Netezza expects to book $100 million in orders this year, says Saxena. (The word Netezza translates to "results" in the Indian language Urdu.)

The success of Netezza motivated a few other like-minded startups in data warehousing. Other database appliance sellers include Calpont and Datallegro.

And big companies haven't just stood by. Last month, business software leader SAP (SAP) said it would team with Hewlett-Packard (HPQ) and Intel (INTC) to build its own black box for data warehousing.

Saxena says his firm's biggest challenge is its lack of brand recognition, especially since many rivals are well-known.

"Most people have not heard of us or our appliance," he said.

Netezza has made progress in reading data directly from disks without transfers, concedes Dan Higgins, Teradata's director of technical marketing. Yet he says Netezza can't match the depth or breadth of functions offered by Teradata.

"The trade-off is that (Netezza) works fast, but you give up the ability to do highly tuned queries," said Higgins.

Still, speedy queries were enough to sell Premier Inc. on the strengths of Netezza. Premier offers a range of data services for hospital clients.

The Netezza appliance can return massive data queries in minutes rather than days, says Gary Feierstein, Premier's vice president of information technology.

He says it's hard to put a price tag on such a performance gain.

"Bottom line," he said, "this is an order of magnitude difference over running the same queries on our other systems."

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