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Why big data startups can expect big investment

Tech­nol­o­gy star­tups spe­cial­iz­ing in big data are set for extra­or­di­nar­i­ly lucra­tive times, accord­ing to a new report from Gart­ner Research.

In news guar­an­teed to bring a smile to the face of every chief rev­enue offi­cer and busi­ness devel­op­ment asso­ciate in the land, Gartner’s research sug­gests that big data will gen­er­ate a mas­sive spend on IT, amount­ing to $232 bil­lion by 2016.

Implic­it in this head­line fig­ure, how­ev­er, is the will­ing­ness of the ven­ture cap­i­tal investor com­mu­ni­ty to go on fund­ing big data star­tups. Last week, Moun­tain View-based start­up Bloom­reach announced that it had secured $25 mil­lion for its seman­tics-inspired big data appli­ca­tions, while fel­low ris­ing star Mon­go­HG raised a cred­itable $6 mil­lion for its unique data­base as a ser­vice. Mean­while, the cre­ator of the first SQL-com­pli­ant data­base fash­ioned spe­cial­ly for Big Data appli­ca­tions, bagged a $4 mil­lion invest­ment for its new SQL Engine.

One man’s deep dis­rup­tion is another’s opportunity

The pletho­ra of well-fund­ed star­tups in the field of big data is no mere con­tin­gency; accord­ing to Randy Bias, the Co-founder and Chief Tech­nol­o­gy Offi­cer of Cloud­scal­ing, the whole mar­ket is under­go­ing a “deep dis­rup­tion.”  The IT mod­el pio­neered by leviathans like Ama­zon, Google and Twit­ter begins with ultra-effi­cient dat­a­cen­ters, reach­es out to open hard­ware ini­tia­tives such as Open Com­pute, and then extends into a major transformation.

This tech­nol­o­gy-dri­ven dis­rup­tion is man­na from heav­en to tech star­tups, because data­base infra­struc­tures inevitably have to be altered to make use of the new scale out archi­tec­tures. The trans­for­ma­tion of the data­base mar­ket is rep­re­sent­ed by Mon­go­HQ and oth­er star­tups like Splice Machine, while Bloom­reach shows how the new data infra­struc­ture enables apps to har­ness the pow­er of scale out sys­tems, going way beyond what exist­ing SaaS appli­ca­tions provide.

Invest­ment guaranteed?

Ven­ture cap­i­tal firms aren’t blind to the tran­si­tion. The man­ag­er of the big data fund at Accel Part­ners, Ping Li, con­firms that the mar­ket is dri­ving a broad and diverse need for new data­base archi­tec­tures. All of which adds up to one thing: ven­ture cap­i­tal firms will be invest­ing gen­er­ous­ly in data infra­struc­ture and big data apps for some years to come.

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