Who will be the big winners?
Everyone is jumping on the big data bandwagon. Not just Web 2.0 type of companies like Facebook and Twitter, but 2012 will be the year that big data comes to the enterprise. All of this big data will drive more NoSQL in the cloud, in the enterprise and everywhere in between. This bodes well for many of the startups who drive the NoSQL market. Companies like 10Gen who make MongoDB, Couchbase, and Cassandra should all benefit from this rising tide of adoption.
With this growth comes the inevitable consolidation and acquisition of course. If Oracle’s past behavior is any indication they will give their home grown NoSQL solution a little while and then buy one of the leaders in the market. Expect IBM, maybe HP and other big names in tech to buy their way into the NoSQL market as well. Perhaps even a cloud provider who wants to own their own NoSQL. Yes indeed the money will be flying chasing the leaders of the NoSQL pack.
But the big money will chase the leaders only. My friend Brad Feld of Foundry Group wrote a blog article last week called Code Red. It was about pulling out all of the stops if another company is threatening your leadership position in the market. If you get a chance, give it a read. One thing Brad said in his article was:
“The VC cliche is that the market leader gets 50% of the value, #2 gets 25% of the value, #3 gets 10% of the value, and #4 through #263 get the remaining 15%. While these numbers move around (I’ve been in situations where #1 got 90% and in situations where I got lucky and #17 got 25%) they are directionally correct.”
This same formula will apply in the NoSQL market. The perceived market leader is going to grab the lion’s share of the money, as you go down from the leader spot, the exit value will be less and less. Unless the leader opts to fight it out and go IPO “to realize their full value”. In that case the #2 or #3 player will grab the big pot of gold. But once the big pot of gold is gone, the subsequent pots will be smaller and smaller.
So that is why it is so important that the NoSQL players establish themselves as the market leaders now. You are seeing this message from 10Gen, Cassandra and many of the others. The stakes here are high and to the victor will go the spoils.
So expect intense jockeying for position by the NoSQL players and look for acquisitions to start by the end of the year. No one wants to be the last one at the dance, but someone will. Of course they will say they want it that way because they want to keep independent. Malarkey. No one wants to be the last one left without a suitor.
By the way it is not just the NoSQL market that will see this, but I think the Hadoop players will see similar activity. The big boys will come by with their checkbooks and they will get snapped up too.
