Why Did HCL Acquire Palo Alto-Based Actian, A Database Management Firm

In a bid to expand its products and platforms ecosystem, Indian IT bellwether HCL Technologies has snapped up Palo Alto-based Actian, a market leader in hybrid data management and famous for the world’s fastest columnar analytics database. According to reports, HCL will hold the majority stake in this deal, owning 80 percent while SEP, a private equity firm will hold 20 percent stake.   However, the data management company Actian will continue to operate as a separate entity within the HCL Technologies ecosystem, led by current CEO and president, Rohit De Souza.  “The combined force of HCL’s next-generation products, platforms, and services; SEP’s experience in scaling enterprise software businesses; and Actian’s tradition of innovation in data management, data analytics, and integration technologies will enable customers to tap into the disruptive potential of their data and deliver tangible business results,” De Souza said in a press release.

Why Did HCL Acquire Actian?

• According to 451 Research authored by Research Director Matt Aslett, through the Actian acquisition HCL Technologies has added new data management and -processing capabilities to its wider portfolio.
• Meanwhile, Palo Alto based Actian that has had a lot of customer wins gets a new parent company with deeper financial pockets and potential for multiple partnership opportunities.
• With a majority stake in Actian, 451 Research report says that the Noida-based IT giant would also bolster its portfolio with Actian’s Mode 2 offerings which include cloud-native consulting services and digital applications. There would also be other components such as DRYiCE automation and orchestration platform and sales strategy.
• Another key area is that the acquisition of a majority stake in Actian is in line with the Indian company’s Mode 1-2-3 strategy. The buyout is an attempt to expand the ecosystem of products and platforms through joint development and sales opportunities.
• So, while the company competes in areas like traditional IT services such as infrastructure management, BPO, engineering and R&D, it also offers Mode 2 competencies like cloud-native and digital applications, cybersecurity and Internet of Things (IoT).
• Even though Actian has a customer base of over 10,000 customers, the company had been struggling for some time with organisational and portfolio changes, observes the report. Over the years, the company sharpened its focus on hybrid data management and re-organised its portfolio on the lines of data integration, data management and data analytics.
• With the access to HCL’s wide customer base, Actian, best known for its product Actian X relational database, can compete along with databases biggies such as SAP, Oracle, IBM, Pivotal’s Greenplum and HPE’s Vertica analytics platform, among others.
• Actian NoSQL competes with the likes of MongoDB and Microsoft in the NoSQL database space. And when it comes to its data integration capabilities, Actian’s platform competes with companies like TIBCO and Talend.
• Besides, Actian also has a connect with Michael Stonebraker and Eugene Wong who developed a relational database known as Ingres at University of California. After a string of acquisitions and name changes, it became Actian that now competes with major database companies.

Outlook

Talking about the acquisition, C Vijayakumar, president and CEO at HCL Technologies said, “Actian will play a critical role in enhancing HCL’s Mode 3 offerings in data management products and platforms. Actian’s products when combined with HCL’s Mode 2 solution offerings like Cloud Native, Digital and Analytics, and DRYICE, will be a powerful proposition to harness the power of hybrid data.” By broadening its product ecosystem, HCL’s customers would be able to tap into the disruptive potential of Actian’s data management, data integration and data analytics capabilities and gain maximum value. This will also help the Indian IT giant compete in the database segment with Oracle, SAP, IBM, Microsoft, Pivotal and HPE Vertica. According to the 451 Research, the buy-out is a smart move for HCL Technologies as it would allow Actian to operate as a separate entity with a parent organisation backing it. HCL reported a revenue of $7.6 billion in the last 12 months — and Actian that has lagged behind database majors like IBM and Oracle will now have access to HCL Technologies cloud-native consulting services, IoT and digital applications, and automation and orchestration.