CSC buys Infochimps to help build its Big Data business

OVUM VIEW

Summary

CSC has taken a major step in developing its Big Data practice with the acquisition of data cloud platform provider, Infochimps. A small, privately held company, known for its automated framework for elastic scaling of Hadoop, NoSQL, and stream processing analytics, Infochimps had set its sights on the enterprise business. With CSC, it gains the channel and resources to become an enterprise presence. For CSC, Infochimps provides a ready-made Big Data cloud platform for jump-starting client engagements and standardizing delivery. CSC has BI experience, but needed this acquisition to accelerate its Big Data initiatives and gain additional expertise and parity with competitors that have been more active in this space. This is part of CSC’s ambitious business incubator strategy, which became possible thanks to ongoing restructuring that freed up capital and cash.

Infochimps’ framework automates the scaling up and down of Hadoop clusters

Infochimps started in 2009 as a data aggregator and marketplace, but changed course when it found that the market first needed the analytics tools required to derive value from the data itself. Its “secret sauce” is a framework for servicing data marketplace customers using open source platforms. Highlights include the ability to automatically scale up and down Hadoop and other Big Data platform clusters, and orchestrate control of them. These capabilities were previously largely absent for existing cloud-based Hadoop services.

Infochimps offers a comprehensive set of data services in a pre-integrated PaaS solution hosted on public clouds such as Amazon Web Services and Rackspace, and virtual private clouds such as those powered by VMware and OpenStack. Infochimps has a best-in-breed strategy, supporting Apache Hadoop for batch analytics; HBase and ElasticSearch for ad-hoc query; and homegrown open source projects, including Ironfan (orchestration solution based on Opscode’s Chef), and Wukong (a Ruby framework for Hadoop and Storm combined).

CSC will benefit from standardization across Big Data projects

The greatest benefit for CSC is accelerating the deployment through simplification and repeatability in setting up Big Data infrastructure projects, and CSC claims that projects could now go live within weeks, not months.

Infochimps will provide a standardized Big Data reference platform that can be quickly and easily swapped in and out of CSC projects. However, CSC expects most projects to still require significant services to address customized analytic and application development needs, offering plenty of opportunity for CSC to sell billable consulting hours (consulting growth is a key CSC initiative).

Ovum believes there are two ways that CSC can channel Infochimps’ technology and expertise: as a horizontally focused turnkey data services environment, or as target for developing industry-specific data services. The former means close alignment to core CSC Big Data consultancy engagements, particularly around systems implementation, project delivery, and transformation services, focusing on batch, realtime streaming, and ad hoc analytics. The latter means embedding Infochimps as a core part of industry-specific service and solution offerings around Big Data. CSC primarily goes to market with a vertically aligned strategy, but there is no reason it could not and will not do both, depending on the engagement.

CSC expects Infochimps to be additive to its growth

Infochimps is CSC’s second recent acquisition in the data analytics space. In October 2012, CSC bought 42Six Solutions, which specializes in Big Data processing and analytics software. It also recently entered into an alliance agreement with Hadoop platform provider Hortonworks.

Like 42Six, Infochimps will be folded into CSC’s existing Big Data and Analytics “incubator” division. This unit, formed late last year, includes the bulk of CSC’s BI consultants. Employing more than 800 people with varied skills sets, ranging from consultancy, software development, and data science, it is intended to operate and grow into a full-fledged business practice for driving future growth. CSC has similar incubators set up for cloud and cybersecurity, and it has wisely folded Big Data with its BI and analytics practice. This aligns with our belief that Big Data will become a natural extension of BI, analytics, and data management.

CSC has set some aggressive targets for its Big Data and analytics division, and is aiming to grow it into a business worth between $1bn and $1.5bn in the next three to five years, a goal the vendor realized it could have never achieved organically. The Infochimps deal will also provide CSC with competitive power against rival firms that are further along in developing their BI/analytics/Big Data strategy and portfolio. IT services firms, including Accenture, IBM, and Capgemini, have been investing in this space for more than three years. Others, such as HP, have established dedicated groups in the last year or so, while India-based players, including HCL, Infosys, TCS, and others, have elevated analytics/BI as part of their growth strategies.

By picking up solid Hadoop skills with the Infochimps deal, CSC will be better prepared to enter this competitive fray, assuming that it successfully integrates and markets Infochimps’ capabilities, especially for its media, communications, and public sector clients.

A good exit strategy for Infochimps as it transitions to Big Data

We were never bullish on Infochimps as a brand name, but the name proved catchy. Infochimps had unique Hadoop cloud platform technology and started to make inroads with Fortune 1000 accounts. However, being a startup placed limits on its growth, and the company was small, having raised around $5m in venture and debt financing since its founding.

Infochimps will now be operated as an autonomous unit of CSC’s business, with most of its employees expected to be retained. As CSC absorbs Infochimps, it will also actively recruit data scientists and will aggressively hire to expand the Infochimps operation.

While Infochimps’ platform is expected to anchor many of its Big Data engagements, CSC will also continue to offer it standalone. In addition, CSC asserts that its technology-agnostic approach to services will remain intact, and it will continue to work with other platforms. However, Ovum believes that clients looking for Hadoop analytics in the cloud will be nudged toward Infochimps as a first port of call.

APPENDIX

Authors

Madan Sheina, Lead Analyst, Information Management

madan.sheina@ovum.com

Tony Baer, Principal Analyst, Enterprise Solutions

tony.baer@ovum.com

John Madden, Principal Analyst, IT Services

john.madden@ovum.com

Further reading

“Differentiation and go-to-market critical for CSC–AT&T alliance”, IT019-003252 (August 2013)

Change Is Finally Coming to CSC, IT019-003044 (July 2012)

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