Microsoft to buy data-warehouse appliance vendor

Microsoft continues its shopping spree to bolster its SQL Server database platform to make it more suitable for large-scale enterprise deployments. On Thursday the company said it plans to buy DATAllegro, a privately held maker of data-warehouse appliances.

The terms of the deal, which comes on the heels of one announced last week to purchase data-quality technology vendor Zoomix, were not disclosed. Microsoft will retain most of the 93 DATAllegro employees, who will continue to work out of their existing office in Aliso Viejo, California.

DATAllegro provides data-warehouse appliances, which combine data-storage functions with business-analytics software. According to the company, its appliances allow companies to rapidly query large volumes of data and have the flexibility and scalability enterprises need, but at a cost-effective price.

The acquisition will allow Microsoft to "compete with the highest-end enterprise data-warehousing solutions," said Bob Muglia, senior vice president of Microsoft’s server and tools business, at the company’s analyst meeting in Redmond, Washington. "It will scale well beyond what Oracle can do today," he claimed.

Microsoft plans to use DATAllegro's technology to extend the capabilities of SQL Server for enterprise customers, making it easier and more cost-effective for them to manage and mine data. The company is expected to reveal more details about what it plans to do with DATAllegro's technology in October at its Business Intelligence Conference, according to IDC analyst Dan Vesset.

Microsoft may run into some challenges when integrating DATAllegro's technology with SQL Server. One technical challenge will be to replace the open-source Ingres database that the acquired company's appliance is based on, wrote Forrester analyst James Kobielus in a research note released Thursday.

Another will be to convince customers to use SQL Server in favor of Ingres, he wrote. "Clearly, that migration to SQL Server may alienate a substantial portion of DATAllegro’s existing customer base," Kobielus wrote, adding that it also will likely raise the price of Microsoft's version of DATAllegro's appliance.

However, on the plus side, Microsoft will provide what "DATAllegro has most critically lacked -- global sales, marketing and support -- "in spades," he wrote.

Muglia said an offering based on DATAllegro will be proof of Microsoft’s commitment to meet enterprises' high-end data-warehousing requirements at a competitive price.

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