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April - 2005 - issue > Entrepreneurship
Netezza Translates Results
Ashwini Kachapeswaran
Friday, April 1, 2005
I magine a system that doesn’t require multiple query, heavy maintenance and provides 10 to 50 times faster and dynamic data retrieval at a fraction of the cost. Is this a utopian suggestion? Not quite. The Netezza Performance Server provides all of the above.

The NPS is now the buzz among the data warehousing community. In the short time since it began shipping the NPS data warehouse appliance in early 2003, Netezza has sold over 50 systems to companies around the world.
The growing market, complex transactions, wide customer and supplier base and the need for dynamic data to make business sense has opened the world of data warehousing for Jitendra Saxena, CEO and Co-Founder of Netezza.

“We looked at the market and felt it would be a good opportunity to integrate hardware and software,” says Saxena, about his shift from software to hardware cum software market.
“We look at our product as an appliance that integrates both hardware and software,” says Saxena, also the founder of Applix systems, a global provider of Business Performance Management and Business Intelligence solutions.

The NPS system stores, filters and processes terabytes of records within a single unit, analyzing only the queried data for each query. Netezza has placed the processor power next to the data, allowing the NPS system to speed through processes that would occupy most data warehouse systems for hours, or even days. This enables dramatic increases in productivity across the organization.

“Our product integrates storage as well as servers, and we have created a new database software that is designed into this appliance. The software has a standard interface conforming to the outside world, any BI application can conform to these standards and most of them do. Then they can run our product without any problem,” Saxena adds. “It is the standardization that allows the creation of a product like Netezza.”

With stiff competition from the big players like IBM, and Teradata, Netezza provides a proposition that would be hard to ignore. Ten to fifty times faster performance at a fraction of the cost makes NPS simply irresistible.

“Our competition comes from the big guys like IBM and Teradata, every deal we are involved in we compete with these guys. We compete because we have a value proposition, which our competitors cannot even come close to. For example, in all the bench marks our customers have done, and continue to do we are in magnitude better with a fraction of a price,” boasts Saxena. “If you have a very strong value proposition, chances are that you will do okay.”

The word Netezza is derived from the Asian language Urdu, and means “results.” With customers around the world, including Acxiom Corporation, Ahold USA, Amazon.com, Cingular Wireless, CNET Networks, Orange U.K, The TJX Companies, Netezza is firmly poised to carve a big chunk of the market share.

By architecturally integrating database, server and storage within a single appliance, the NPS system delivers 50 times higher performance than the existing systems.

“Our products are deployed at mission critical applications, which requires a fully redundant system. So, in our architecture we ensure there is not a single point of failure in the system and if the drives fail, they are continuously backed out. If the processor fails, the other processors are ready to pick up. High availability is already designed into the product, and we take it for granted that will be a condition for doing business,” Saxena says.

“Our customers are all big names. Every one of our customers has come back and bought more. This indicates the business value their purchases,” Saxena says.

Netezza has grown tremendously in the past year, in the short time since it began shipping NPS in 2003. Netezza has sold 51 systems to companies around the world, bringing its customer base to 23. Saxena and Foster Hinshaw founded Netezza in 2000 and it is based in Framingham, MA. The company has raised more than $68 million from leading venture capital firms including Matrix Partners, Charles River Ventures, Battery Ventures, Orange Ventures, Sequoia Capital and
Meritech Capital Partners.

The reason for starting Netezza was the need for data analysis at the Terabyte level that has changed dramatically. With all the sub-transactions that are now recorded such as quant-data records, internal communications for websites and retail quality programs, there is a huge pool of data which can be mined to provide insight and increased business value.

“Now what you need is something that can process the data very fast so that you can get a competitive edge and compare your customer, supplier, marketing programs. The market is now changing and demanding and there is much more importance on the analysis at the transaction level,” Saxena says.

A business veteran, Saxena has taken his previous firm Applix IPO and claims this time around the challenge is the same but abilities change. “The challenge of a growing business and competing with the big guys is the same.

It is your ability in what is required to build a business that changes. Your network of people is bigger and very helpful the second time,” he adds.

Designed as an appliance that integrates the database, server and storage, the NPS system stores, filters and processes terabytes of data within a single unit. It analyzes only the relevant information for each query, which means a dramatic increase in productivity across the organization. Time isn’t spent running queries and maintaining the database; it’s spent leveraging business intelligence to make smarter business decisions, ask better questions and, ultimately, become more profitable.

The entire system comes in a self-contained single rack that integrates into existing BI environments. Its “load and go” implementation process takes only hours, not weeks.

While competitors like IBM and Teradata provide services and maintenance, Netezza is only focused on technology. “We continue to focus on technology and we believe there is much more room for innovation in the basic product. Our business model calls for a partnership-oriented marketing and selling. We provide the best technology and partner with best people from systems integration, support side to provide the whole solution to the customer. We are not planning to build a professional services company in the foreseeable future,” Saxena says.

Netezza recently opened its office in Sydney, Australia and hopes to establish a worldwide presence. “By expanding our international presence in Europe and now in the Asia Pacific region, we are building on our success in North America and the United Kingdom,” said Saxena. “At this point, the biggest emphasis is to scale our distribution, not only within the U.S., but to expand into Europe and Asia.”

Recently the company added the NPS 8025 model of Netezza’s 8000 Series data center appliance to its data warehousing product line that is targeted at companies with 400GB to 1TB of data. The move signals a focus on new markets, and the NPS 8025 appliance rolls together servers, database software and storage that lets users analyze large amounts of business intelligence data.

“This is an opportunity to build a company that would be able to scale up to $2 billion in the next couple of years,” he says. Netezza closed the fiscal year by doubling its customer list and increasing its sales by 74% over 2003. “The thing that excites me most is the customer traction and the excitement within the customer community about our product,” Saxena adds.

While the company has secured over $60 million in funding, it has not yet secured any of its customers as investors, which would leverage the NPS appliances. According to reports, Netezza is not profitable and doesn’t anticipate reaching profitability for at least another six months. Despite its slick marketing, Netezza will face tough opponents in battle against the likes of IBM, Teradata and Oracle. But the firm is optimistic. The power lies in questioning everything.
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