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The golden age of databases

Protocol Enterprise

Welcome to Protocol | Enterprise, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This Monday: inside the wild world of databases, the great decoupling, and Intel eyes SiFive.

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The Big Story

The new database

Databases play an integral role in the modern world. They support everything from the suggestions someone sees on their favorite streaming site to the corporate dashboards that leadership obsesses over.

This fundamental piece of tech is undergoing a revolution. Startups are raising huge amounts and valuations are sky-rocketing like crazy, which is why Protocol just published one of our deep-dive Manuals into The New Database.

  • Over the course of a month, four companies — Dremio, Cockroach Labs, Starburst and Databricks — collectively raised nearly $1.4 billion. Money is apparently no object these days, but that is still an eye-popping amount.
  • A lot of that activity can be attributed to Snowflake. Its monster IPO proved that a company that wasn't Amazon, Microsoft or Google could succeed. Many rivals, however, see a huge opportunity to steal market share.
  • But it's also a testament to the fact that the industry is undergoing a massive change, with the possibilities of the tech expanding and an evolving definition of what it means to be a database.
  • Companies like Databricks and Dremio are pitching whole new types of architecture, while others like Cockroach Labs are doubling down on niche capabilities they hope will help them stand out in an increasingly crowded industry.
  • "There has never been more transformational activity going on in this market than there has, frankly, in memory. And I started my career in Wall Street writing COBOL programs against file systems," Gartner research SVP Merv Adrian told Protocol.

The reality is a market correction in the future. When and how that happens, though, is anyone's guess.

  • "[The upstarts] need to achieve escape velocity. They need to get big enough and successful enough to escape the creative ferment around them," said Adrian. "Most of them will not do so."

But right now, it's a golden age. And as more non-tech businesses realize the power of data, databases are going to become even more important.

  • Our Manual helps shed light on both the major infrastructure changes underway and the companies challenging for dominance in the new landscape.
  • The concept of a "data lakehouse," for example — technology that resides somewhere between a data lake and a data warehouse (this is a good explainer on the differences) — is poised to play a big role in the future of machine learning.
  • It's one reason why Databricks is such a closely-watched startup right now and why it's valued at $28 billion.
  • "This space is going to really look different in a decade. It's the early innings," CEO Ali Ghodsi told Protocol at an event earlier this month.
  • Right now, Databricks is increasingly going toe-to-toe with Snowflake. The dynamic is pretty startling given how much power the major cloud providers assert over the market. But both companies are showing the value of being an independent vendor in a sector increasingly dominated by the three giants.

For those in the field, it's an exciting time, akin to when Oracle took off in the 1990s. But like most technology, the challenge becomes selling enterprises on the vision.

  • Corporations are rushing to embrace data. And artificial intelligence is poised to start expanding within organizations in a major way, beyond pilot projects. In the first quarter of 2021, for example, 58 companies mentioned "AI'' on investor calls, according to data compiled by FactSet. That's up from eight in the first quarter of 2016.
  • But there are hurdles ahead, especially when it comes to hiring. Between May 2015 and May 2021, the proportion of machine learning jobs to overall tech jobs jumped from 1,021 roles per million tech jobs to 3,289.
  • "It's not a technology challenge. It's a talent challenge," said Whirlpool CIO Dani Brown. "We have the data. We have the technology that enables us to gather that data … but now it comes down to how you build the analytical models."

While funding may be easy for a startup right now, taking on Google, Microsoft and AWS will be much harder. And the three are bound to still capture a significant portion of the market. Still, it's rare to see those organizations sweat.

The pace of growth of companies like Snowflake is a clear signal that customers are eagerly seeking options beyond those mega-vendors. We'll know in a few years whether those smaller providers capitalized on their early success to become independent power players in enterprise tech.

— Joe Williams


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This Week On Protocol

Edge of glory: A push to decouple the front and back end of websites — a philosophy known as Jamstack — is emerging in enterprise tech. And Protocol's Tom Krazit has everything you need to know.

Ditching the warehouse: Dremio CEO Billy Bosworth got his start in the industry right as the Oracle database was taking off. Now, he's trying to make that tech (and others) obsolete. Dremio is one of several startups specializing in so-called "data lakehouses," which Bosworth and others think are superior to the more commonly used data warehouse.

Coming Up

June 15: Oracle reports earnings.

June 17: Adobe reports earnings.

Around the Enterprise


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Thanks for reading — see you Thursday!

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