Red Brick Systems Inc is readying new product based on the Discover query/analysis and Fusion data extract/transformation twin set it paid Engage Technologies $12m for some 6 months ago. As an initial offering, come June the company will be selling what appears to be a well orchestrated product quartet based around its eponymous data warehousing database, its Data Loader tool, the DataMind data mining product and the acquired Engage Fusion data extract and transformation engine. It’s a tightly integrated data warehousing platform, the company claims, and one that promises to automate the entire process of extracting, transforming and loading data into a warehouse, thereby reducing data warehousing set-up and operating costs considerably. To date, the complexity of the whole data transformation process has left businesses looking at a high cost of entry into data warehousing. By acquiring and integrating the Engage data preparation and transformation capabilities, Red Brick aims to be able to shrink the set up time for a data warehouse and get customers to the application stage, which is where the payback is. Moreover, closely integrated with the Red Brick Warehouse, the Fusion product provides warehouse builders with an graphical development environment for constructing and deploying complex, multi-source, multi-target transformation routines. So the product seems to deliver sophisticated, fairly flexible data integration capabilities without requiring developers to write masses of custom code that has to be reworked whenever a data warehouse environment is modified – a sure fire way of cutting the cost of ownership.
Enhanced version
As a follow up to this release (to be announced 18th May), by the end of the year we can expect to see a version enhanced by the addition of a front-end query tool based around the Engage Discover tool, the other part of last year’s buy. This is said to be capable of delivering complex queries against large amounts of data. The product generates optimized SQL and processes results on the database server. Users then perform interactive queries based on result set refinement and retrieved results from the server. Red Brick has work to do yet though, to ensure the product will leverage all of the specialized capabilities of the Red Brick Warehouse, including RISQL support and data mining. Analysts at Morgan Stanley confirm that Red Brick seems to be aiming to pull more of the transformation process as well as front-end analysis into its product line and ultimately combine those products with consulting services. The idea is to take ownership of more of the solution and get customers past the sticky part of building a data warehouse. The company plans to leverage its in-house expertise to help customers reduce implementation times. (And as part of the product deal with Engage, the company inherited a 23-strong marketing and development.) So the acquisition and subsequent Red Brick Fusion development seems a vital piece in the company’s evolution towards a fully integrated and scalable platform for building and maintaining corporate data warehouse applications. And there is every reason Red Brick needs to succeed here. Despite its brand image as an out-and-out data warehouse specialist, Red Brick still looks far from profitable, doing no more than $10m this quarter. And a new threat is emerging. Applications providers like SAP and Oracle have announced embedded data warehousing suites as part of their enterprise applications. The idea is to provide turnkey data warehouses within the architecture of their ERP (enterprise resources planning) applications so that a business can opt for an embedded data warehouse in conjunction with its ERP rollout.
One-to-one web marketing
But with the acquisition, Red Brick has effectively expanded its position as a provider of a RDBMS specialized for data warehouse applications to a provider of a data warehouse platform that should enable vertical industry partners to quickly design and develop highly tailored data warehouse applications. The acquisition also provides Red Brick with the ability to deliver next-generation application suites in rapidly expanding markets such as internet commerce and what is being dubbed one-to-one marketing. This is exactly what it is doing for organizations such as AOL, WebTV, and Amazon.com, to name … well, perhaps, all three. Back in September, Red Brick and Engage Technologies also signed a marketing and cross-reseller agreement for Engage’s one-to-one web marketing solution set. This resulted in a new Red Brick application product offering for customers seeking an integrated, high-performance and highly scalable web marketing solution. Traditional data warehousing can be seen as an attempt to embrace the breadth of a market, where there will always be the temptation to analyze markets as opposed to understanding a customer. The next phase in data warehousing however will be more concerned with the depth of customer interaction. This is a profound change in the way data is used. It’s what Butler Group has described as a move to ‘quantum data warehousing’: the application of data warehousing technologies and methods to the analysis of individual entities (customers, suppliers, etc). Just as the classical laws of physics break down at the atomic level, so the traditional methods of data warehousing are not applicable to individual entities. There is no notion here of identifying groups of customers whom might be targets for a particular promotion. In quantum data warehousing, we know for sure whether a particular customer would be interested in a new product. Data collection, data extraction and data transformation is key to understanding this new approach. By collecting and marching through masses of web-generated ‘click’ data, a business can start to interact with customers in a more meaningful way and one that is full of context.
M&A Impact.
