Workday Nabs Platfora as Big Data Consolidates

Human capital management (HCM) software maker Workday last week bought Platfora, one of the oldest providers of Hadoop-based analytic solutions. The deal showcases both the need for analytic prowess in the enterprise software market, as well as the consolidation that’s to come.

Workday (NYSE: WDAY), which recorded $1.2 billion in revenue last year, says it plans to use San Mateo, California-based Platfora’s technology to bolster its own offerings, which are delivered over the Internet via the software as a service (SaaS) delivery model.

“With the Platfora team and its technology unified within Workday, we will continue enriching the analytics in Workday Financial Management and Workday Human Capital Management so our customers can be even more prepared to tackle business problems and seize opportunities today and into the future,” writes Mike Frandsen, executive vice president of products, support, and delivery, in a Workday blog post.

Platfora’s Big Data Discovery is a Hadoop-based product geared toward helping companies automated many of the steps involved in analyzing big data, from data cleansing and transformation to building models and visualizing results. The company, which entered the market in 2012, had recently begun to replace its core MapReduce technology with Spark.

Now that it’s owned by Workday, it’s unclear what it will mean for Platfora’s customers, which included names like Bank of America, Disney, UnitedHealthGroup, Sears, and J.P. Morgan. “If you are a Platfora customer, you will soon be hearing from our team about the transition and what it means for you,” write Platfora president and CEO Jason Zintak and Ben Werther, the founder and executive chairman, in a Platfora blog post.

The lack of reassuring words from Workday and Platfora suggests that existing customers may not factor into Workday’s plans for the technology.

Dave Mariani, CEO of AtScale, a competitor of Platfora’s that develops an OLAP-for-Hadoop offering, says, as a cloud company, it’s unlikely Workday will want to continue to support an on-premise solution like Platfora’s.

“It doesn’t seem to fit with Workday’s DNA or strategy to continue offering Platfora as a standalone product,” Mariani tells Datanami via email. “I was very surprised to see a SaaS based application company like Workday gobble up an on-premise big data platform company.”

However, Mariani says the acquisition is a positive sign. “There may be a host of other enterprises who value big data analytics as a strategic necessity,” he says. “There may be a realization that the new analytics world is complex and it may be more prudent to buy it rather than risk building it from scratch.”

To be sure, ERP software makers, such as SAP (NYSE: SAP), Oracle (NYSE: ORCL), and Infor are looking to big data analytics to improve their software. While there’s not a lot of improvement that can be made to, say, a general ledger, there are lots of complicated business processes hidden in ERP suites, such as inventory management and pricing optimization, where big data can help.

Platfora recorded a $30 million round of financing late last year, and brought in a total of about $95 million over its five-year run. Werther stepped aside last year to let former SAP executive Zintak run the show, which concluded with selling the business to Workday.

It’s highly possible we’ll see more of these types of deals, especially considering that once-booming venture capital market is slowing a bit —particularly for newer startups—and that the BI and analytics market is becoming increasingly crowded, which is hurting profits for companies like Tableau and Qlik, which was bought by a private equity firm last month.

With a new group of analytics vendors like AtScale, Kyvos Insights, Arcadia Data, and others set to carry the torch of Hadoop, there’s no sense in writing the obituary yet on the big yellow elephant. According to Mariani, Platfora’s acquisition by Workday doesn’t reflect badly on Hadoop.

“It’s clear that we’re witnessing a disruptive transformation in the analytics and BI market,” Mariani says. “From a broader big data market perspective, I think it [the Platfora acquisition] has little to no impact. The momentum of Hadoop is an unstoppable force and the Fortune 1000 is just beginning to get involved.”

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