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As president and CEO of data warehouse appliance maker Netezza, Jim Baum is responsible for setting the strategic direction of the company, as well as overseeing its day-to-day operations, global product development, sales and marketing. Baum worked to take Netezza public in 2007, leading it through 14 quarters of growth and ultimately driving the acquisition of Netezza by IBM in 2010. During a July 18 call with analysts about IBM’s second-quarter earnings, IBM chief financial officer Mark Loughridge said Netezza’s transactional volumes were up 70 percent year-to-year. Baum spoke with eWEEK Senior Editor Darryl K. Taft for the following interview.
eWEEK: Coming off strong earnings, can you talk about how Netezza has accelerated since joining IBM?
Baum: It has been a pretty phenomenal acceleration. Just to give you an idea, within the eight months since we joined IBM, we’ve expanded Netezza into more than 100 new countries, including growth markets such as Brazil, Russia, India, China, Turkey, Korea and South Africa. We have more than doubled our global ecosystem; today, nearly 300 business partners have adopted Netezza technology, compared to less than 70 pre-acquisition. We have also seen the adoption of integrated hardware and software opportunities across new industries where we have not had a strong presence before, such as banking and travel and transportation. Beyond access and footprint, IBM has significantly increased the investment in our technology.
eWEEK: What’s the future for big data analytics? Where’s the market headed?
Baum: Big data analytics are going to be transformational. By the way, big data used to mean just big volume, but as we look at this more holistically, big data encompasses a much richer variety and more real-time velocity of data as well–including unstructured data, along with all of the structured data we already manage today.
The market is struggling to figure out how to collect and make sense of this data. That’s the challenge and opportunity. Our 2011 IBM Global CIO Study shows 83 percent of 3,000 CIOs surveyed say applying analytics and business intelligence to their IT operations is the most important element of their strategic growth plans over the next three to five years.
And let’s not forgot how IBM provided a glimpse into the future of big data analytics with Watson. Watson is the ultimate example of a workload optimized system that sifts through unstructured data to find answers to questions within seconds.
eWEEK: What’s the best way to handle big data?
Baum: There is not just one way to handle big data-there are many. The challenge is not capturing and analyzing all of the information–it’s not an ‘all you can eat’ model. The challenge is capturing and analyzing the right data, so companies can act quickly. Big data needs to be simplified.
For example, real-time streams should be handled in streaming systems that are optimized for real-time activity. Complex analytics should be handled by parallelized warehouse appliances. Hadoop analytics can be mapped to purpose-built technologies for Hadoop. And so on…
eWEEK: Just how big do we expect big data to get?
Baum: In terms of data volume, it will continue to explode. IT industry analysts predict massive data growth, but again, it’s not just about the volume.
It’s about getting the right information from big data and acting upon it in a way–and time–that matters and drives growth for our clients.
Capturing and analyzing big data is a tremendous opportunity to help our clients transform their business and stand out as leaders in their industry.
eWEEK: Why is there a need for a Netezza big data appliance?
Baum: We’re seeing a vast amount of data being generated from new sources, including cloud computing, social networks, sensors and mobile devices across all industries. Manufacturing and retail clients are building RFID [radio-frequency identification] systems for supply chains, health care clients are digitizing and storing medical records, and utilities are putting more smart meters into place.
These clients require a custom-built appliance to quickly analyze petabytes of information.
For enterprise clients, they can apply Netezza technology in a targeted fashion with specific workloads, or as part of a broader big data analytics platform for massive-scale analytics that include different parts of IBM’s analytics portfolio. Midmarket clients can use Netezza as a core business computing system. However a client uses Netezza, our technology is integrated and fits easily inside existing IT infrastructure. This is a different approach from our competitors who require clients to spend a lot of time integrating proprietary technologies that are expensive to run and maintain.
eWEEK: Can you identify and discuss some of the successes Netezza has had in the big data space?
Baum: Harvard Medical School and Brigham & Women’s Hospital is a great example of how analytics can impact the world. They are using an IBM Netezza appliance to track the effectiveness of prescription drugs. Their research teams are using the technology to conduct advanced drug safety studies that look at the effects of drugs in large numbers of people based on insurance claims data. These studies are designed to answer important questions, such as which anti-inflammatory drugs carry a risk of heart attack, what osteoporosis medications are most often used with good results, or how cost-effective are some drugs in treating mental health disorders.
Another good story is Kelley Blue Book, the United States’ largest and oldest automotive vehicle valuation company. They are leveraging the IBM Netezza technology for improved customer satisfaction and increased revenue and profitability. KBB is also evaluating our latest appliance-the IBM Netezza High Capacity appliance–to analyze click-stream data created by users surfing their Website to see what topics visitors cared most about, such as used and new car prices, safety recall and warranty data, and car-buyer reviews. Using the insights KBB gains from analyzing this data, the company could make decisions on where to put sales and marketing resources to grow their operations
Earlier this year, QVC, one of the largest multimedia retailers in the world, chose IBM Netezza to analyze user-generated content from its Web forums and because of its ability to execute a broad set of analytics across large volumes of data quickly and cost effectively.
CSN Stores, the third-largest online retailer of home goods in the U.S., selected the IBM Netezza to quickly mine and analyze terabytes of business data flowing through the company every day. The new appliance powers CSN’s business-analytics platform to monitor trends related to profitability, customer satisfaction, customer retention, order fulfillment and supply chain. With the IBM Netezza appliance, CSN is able to go beyond the capabilities of its legacy data warehouse and answer questions in seconds or minutes that previously took hours or days. The company uses the data to drive organic growth initiatives and discover new ways to better serve their customers.
eWEEK: How does Netezza integrate or play with IBM’s analytics offerings?
Baum: Netezza is integrated with key pieces of IBM’s Information Management and business analytics software portfolio. This essentially means clients can apply different kinds of analytics to different workloads, depending on their needs, ranging from statistical and predictive to streaming analytics.
Our goal is to provide clients more flexibility and choices in the type of analytics they need and can use to grow their business.
eWEEK: What are you hearing from clients that look at Exadata and Netezza?
Baum: When clients ask for a side-by-side comparison between IBM Netezza and Oracle, we win that business more than 80 percent of the time. Netezza appliances are easy to set up and use, and can be up and running in 24 hours. Exadata is complex to use and can take weeks, even months, to get running. Organizations can’t afford to lose days and weeks, as analytics play a large role in their competitive positioning.
eWEEK: What’s the role of Netezza in IBM’s Smarter Planet strategy?
Baum: IBM Netezza’s role in Smarter Planet is helping clients tackle industry-specific challenges. This shared vision was one of the key reasons we were acquired by IBM. For example, we see customers in the retail space looking for new ways to analyze consumer sentiment to drive growth, and health care clients are struggling to manage all the disparate information necessary to improve customer care. In the communications industry, providers are managing and analyzing massive volumes of call data to gain insights on customer trends and improve their overall business. Basically, the Netezza technology is an analytics engine that supports the business outcomes of the Smarter Planet industry-specific challenges.