Dataupia's Hinshaw Back in the Saddle
CEO Foster Hinshaw's reemergence parallels the convalescence of Dataupia itself, which -- after a tough 2009 -- now claims to be back on track.
- By Stephen Swoyer
- March 17, 2010
The return of technology visionary Foster Hinshaw, co-founder and CEO of analytic database specialist Dataupia Inc., was one of the most inspiring events at this year's TDWI Winter World Conference in Las Vegas. Hinshaw's reemergence parallels, in a sense, the convalescence of Dataupia itself, which -- after a tough 2009 -- now says it's back on track.
Just ahead of last year's TDWI conference, Hinshaw stepped down as Dataupia CEO, citing health concerns. He's officially been back in the saddle since November of 2009, but TDWI Las Vegas marked his and Dataupia's most prominent industry appearances since that time.
Last year, he concedes, Dataupia very nearly foundered in a perfect storm of calamity. After he stepped down as CEO, for example, Dataupia had difficulty attracting new venture capital (VC) funding. Then, last April, it started laying off workers, ultimately slashing half its workforce. As a result of layoffs and departures, Dataupia lost vital human expertise, including then-CTO John O'Brien and veteran director of marketing Samantha Stone (who, like Hinshaw, came from Netezza Inc.). Factor in viral speculation about Dataupia's imminent demise -- some of it reported in BI This Week -- and you have a recipe for chaos, Hinshaw argues.
"Starting in late-2008, I started having heart problems. At about the same time, VCs [venture capital firms] started having financial problems. Then we brought in a CEO [Tony Sirianni, a Cognos veteran] who wasn't a good fit. I'll just admit he wasn't a good fit. Meanwhile, I was out the first half of 2009," Hinshaw comments. "At that point, we kind of reset the company. [Sirianni] was trying to take the company more into the retail/pre-packaged solutions, whereas our strength is in very large scalable systems. There was a mismatch there, so we went back to very large-scale systems."
Dataupia's foray into pre-packaged analytics took it far afield from its core market segment, Hinshaw maintains. Its value proposition had always been as a kind of scalable, expandable analytic accelerator for existing DBMS systems. Whereas rival Netezza Inc. used to position its database appliances as rip-and-replace alternatives to performance-strapped Oracle, DB2, or SQL Server data warehouses, Dataupia pitched a complement-and-coexist strategy. From the perspective of some prospects, its pitch was more practical than ideal (see http://tdwi.org/Articles/2008/10/01/Analysis-Strong-Reactions-to-Oracles-Database-Machine.aspx?Page=3), but DW is a particularly practical market segment -- and Dataupia's practicality is its signature value-add, Hinshaw asserts.
"What we have is a kick-ass MPP engine. It's very scalable. You can add a blade or two blades or five blades, and scale from there. In fact, we announced … the largest Oracle database in the world," he says, alluding to Dataupia customer Subex Ltd., a billing and operations support specialist based in Bangalore, India. In that case, Hinshaw says, Subex maintains what is believed to be the world's largest single Oracle OLAP instance: a 510 TB behemoth that supports Subex's Revenue Operations Center (ROC). That implementation is at least two years old.
The analytic database segment is as crowded as ever, of course, but Hinshaw insists that Dataupia and other players have carved out successful niches for themselves.
He downplays the threat of competition between his company and rivals Netezza and Teradata, for example, claiming that Dataupia hardly ever encounters either vendor in the DBMS wilds.
"If you go and look at the field … there are probably five serious players," he observes, citing Teradata and Netezza, among others. "Of those five, there's very little overlap between them. For instance, I've worked hard to keep Dataupia separate from Netezza. We almost never run against Netezza. Their ideal customer is the statistician. They blow almost anyone away in that area. They have a rock-solid machine that's the best in the world at doing that," he points out.
"Our ideal customer is someone who wants something with bigger scale but without all of the limitations of [vanilla] Oracle or SQL Server," Hinshaw continues. Nor does Hinshaw sweat the efforts of Oracle -- which recently unveiled a bigger, brawnier, and even more ambitious high-end DW system, Exadata v2 -- in the data warehousing high-end.
"We literally have [a prominent Canadian customer] that's running Exadata and us side by side," he says. "Really, what it is is a couple of colleagues inside this company. One guy had already brought us in. The other guy heard Oracle's pitch and decided to bring in Exadata, which would end up costing him about $10 million. Our system cost them a fraction of that. It holds more data and gives better results, so you can imagine that there's quite a competition between these two colleagues."
Hinshaw likewise downplays the competitive threat posed by DW giant Teradata, which -- by virtue of its own efforts (Teradata markets a DW appliance that clocks in at $16,000 per TB) -- has displayed a willingness to grapple with Netezza, Dataupia, and other players in the analytic database market. In the past, Hinshaw concedes, Dataupia positioned itself as tantamount to -- if not in competition with -- Teradata. That's clearly not the case, he concedes.
More to the point, Hinshaw stresses, Dataupia almost never tries to displace Teradata in practice. There's really no point, he says. "Teradata is good with the enterprise data warehouse. They're the best in the world at that. The enterprise data warehouse is kind of like your attic. It's where you store all of your stuff. The challenge there is how do you store thousands of different types of data effectively? That's what Teradata does really well," he explains, alluding to Teradata's vaunted mixed workload capability.
"That's not what we do. We started going out against Teradata, and that really isn't our strength. It isn't Netezza's strength, either, and I think they'd admit that. For companies or organizations or groups within an organization that are looking at making things better, those are the customers that all of the analytic vendors -- [i.e.,] Dataupia and all of the vendors that target large data sets -- go after. Frankly, that isn't what Teradata does best."
Hinshaw still endorses his famous "TiVo test" that takes on the analytic database segment. Customers do want DBMS products that deliver a turnkey (or mostly turnkey) experience, he says. and there's still plenty of demand for DW appliances, Hinshaw argues, citing the success of Netezza and newcomer Kickfire Inc. All told, he asserts, Dataupia has righted itself after an especially rocky 2009. Unlike many of its competitors, he claims, it's profitable.
"We're doing well. What I like is that of the [database appliance] companies, we're the only one who's cash-positive right now," he says. The climb to profitability was a long, hard slog for rival Netezza, which didn't become cash-positive until 2008, its first full year as an independent entity. (Since then, Netezza has been consistently profitable.) Hinshaw sees Dataupia's positive cash flow as an especially compelling validation of its position.
"Ask the other analytic vendors, other than Netezza, if they're profitable. They probably won't tell you. It took Netezza years to become profitable, but we did it. We're cash positive. Plus, we have mature customers and we have a great story to tell. I'm extremely excited to be back."