Rebellion and responsibility are native instincts in life and in business. When it comes to cutting ties to old ideas, Kognitios U.S. CEO John Thompson has been there and done that in a 25-year technology career spanning well-established vendors, startups and consulting. In private life, Thompson pursued a dirt bike passion from age five, but today, mindful of his daughters soccer career and his sons fastball, has dialed back to his preferred Harley-Davidson and always wears a helmet. What excites Thompson in business these days is an opportunity to pitch fast and flexible database software (Kognitios WX2) against some disruptive delivery models and hardware advances, as he explained to DM Reviews Jim Ericson.
DMR: Some people are still confused about Kognitios legacy with WhiteCross and different product strategies in the U.S. and U.K.
John Thompson: WhiteCross has been in business since the late 80s, had come to the U.S., left and then was merged with Kognitio in 2005. The new board members wanted to see an ongoing record of product improvement, moving the WX2 product from the WhiteCross hardware/software product to a software-only environment. Once Version 6 had solid traction and three years of profitability in the U.K., they decided to reenter the U.S. market. Ive heard people say WhiteCross or WX2 is coming back; others are seeing us as Kognitio for the first time. The products are the same in both markets, though we dont offer data migration in the U.S. We do offer WX2 for data warehousing, as software, as an appliance or through data as a service [DaaS], and we offer other services that help people build robust and reliable BI implementations, though we dont sell any of that software ourselves.
DMR: Well talk about delivery models, but first, what do you think is causing the biggest buzz inside Kognitio right now?
JT: Everybody is truly excited about some new implementations were looking at with U.S. prospects around in-memory databases. Were talking to one company about a 40-terabyte in-memory database. Were talking to another prospect that needs an in-memory database starting at one terabyte but wants it to grow to 25 terabytes in one year and 100-plus terabytes in two years. When people see 50, 60 or 80 times faster performance than what theyre looking at in an appliance, they tell us its a game changer. The in-memory aspect of WX2 is really getting a lot of attention.
DMR: Were looking so much at the appliance model for cost and performance, how do you describe the trade-off?
JT: The value proposition is that youre completely changing how you look at data. Most of our prospects have computers and databases that are literally their plant and equipment. Its their factory. When they see empirical tests showing that things can be so much faster on commodity hardware rather than a proprietary box, theyre very excited. We have conversations about selling software, conversations about appliances and also many conversations about offering it as a service. To us, its really the same bundle of value, and the customer decides how they want it delivered.
DMR: How do you avoid competing with yourself among your partners?
JT: Were part of the market continuum, and customers will have their own preferences for their own reasons. If a customer wants a Sun or HP or IBM-based appliance, thats fine with us. If they want one of our DaaS services but want to own the hardware in their data center, thats fine with us also. It is part of our positioning to offer a stream of value for all of our customers.
DMR: Do you see this sorting out over time?
JT: I think commodity hardware is just going to be the cheapest, best and most reliable path going forward. We dont see a whole lot of runway in being a proprietary hardware vendor, though other people have that model and seem to like it.
DMR: Okay, lets get to DaaS. Ive heard you are running pilots; whats the real status quo and uptake?
JT: Its been very good. Were at a point now where were actively bidding and producing pricing for customers that want DaaS services. In fact, we bid two DaaS deals just this morning. We have two large hosting providers in the early stages of discussing how theyre going to run DaaS services in their environments. We want to be very clear about what were talking about. In the U.K., we have a number of DaaS customers, one of them is LMG, Loyalty Management Group. They bought an HP blade-based appliance from us thats about 10 terabytes in size. Then, in our Bracknell [U.K.] data center, we run their development system, test system and backup and recovery systems as DaaS services. When we bid the deal it raised the price by about one-third in the services model; with proprietary hardware, the cost was three times higher. Were also providing on-premise DaaS services to a pharmaceutical company in the U.S. where the hardware and the database is in their own data center, and we run it for them.
DMR: So theres no single trend in the in-house versus outsourced data model?
JT: Its going to go back and forth. Weve run British Telecoms pricing data warehouse as a service for 10 years now. At first, they bought an appliance from WhiteCross, said they loved it but didnt want to run it. That was the genesis of our services business. This morning I had a conversation with a company with a large data warehouse running in house. They want to outsource it for a couple of years and then bring it back in. These people are looking at their experience, their cost base, their expertise and [managing] their business model and investment.
DMR: Does it seem obvious that well be offloading more non-core data functions in the next several years?
JT: I absolutely agree that will be the case, and thats why were putting so much effort into building out our DaaS infrastructure as a small provider in the overall ecosystem. Businesses want or will want data warehousing on demand, business intelligence on demand, new interactive services theyve never had. All those things can be addressed with WX2, and we believe 40 to 60 percent of our business in the U.S. over the next 12 to 18 months will come from DaaS.
DMR: Thats a huge number. Any last thoughts on what else we should be watching out for?
JT: Weve done some early stage testing on different types of solid-state devices, and were seeing performance that is just mind-blowing. WX2 by itself is very fast, but when you couple it with whats coming from hardware providers and systems paradigms, well see power consumption drop dramatically, well see load speeds go through the roof and query response times that will be stunning in the next couple of years. Its going to make peoples heads spin.
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