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January 27, 2012

Is Boston the Next Bastion for Big Data?

Nicole Hemsoth

In a recent report from the Mass Technology Leadership Council called “Big Data and Analytics: A Major Market Opportunity for Massachusetts” there are over 100 existing big data companies in the metro area with another 20 startups operating in stealth mode.

Additionally, the authors claim that as of 2012 there are likely close to 60,000 Bostonians employed in some capacity as data scientists or managers.

What does this mean for Boston’s economic future? The report claims that further growth, which is certainly anticipated for the database and analytics market over the coming years, could result in the addition of another 50,000 jobs by 2018.

When you really think about it, it makes sense that Boston might be a hub of tech innovation since it’s at the heart of cutting edge educational and research centers. From MIT to Harvard and the host of other local institutions (MITRE, Boston University, etc.), it’s a city with a rather beefy braintrust.

No matter what the exact balance of reasons might be for its success, it is true that Boston seems to have an uncanny knack for serving as home base for a large number of recognizable companies that feed the big data boom. For instance–

In addition to these companies, the Mass Technology Leadership Council report points to acquisitions and funding of startups in the area as a key to big data growth. They point to what might be the best example of this via IBM. As the authors note:

“Through internal development and acquisition, IBM is building a range of big data products and services. Its acquisition strategy shows the importance of made-in-Mass data and analytics expertise. In March, 2005, IBM announced its purchase of Westborough-based Ascential Software for $1.1 bullion—a price that was four times the company’s 2004 revenue and 73 times its earnings. In 2007, IBM paid $4.9 billion to acquire the Canadian business intelligence software company, Cognos, whose U.S. headquarters were in Burlington, Mass…. Most recently, in 2010, IBM paid $1.7 billion for Mass.-based Netezza Corp.”

These are only a few examples, of course. HP acquired Boston-area startup Vertica, Oracle snatched up Endeca and Phase Forward—both from the Bay City. And if this trend continues, the startup culture that seems to be thriving in Boston could bring the city more riches and more involvement from mega technology companies. Some of those outfits, like HP for instance, might even consider moving in permanently with satellite installations.

An upcoming event at the Harvard Innovation Lab in late February will explore the idea of Boston’s big data future in more detail. The organizers say they hope the conversation will “engage further not only the current, thriving data and analytics startup scene, but also its future in Boston and what seem to be the trends moving forward.

It will be interesting to watch how Boston’s role in the big data ecosystem evolves and what big tech companies will continue to find in the area.