What Happened at Basho Technologies, NoSQL Pioneer?


Basho has been a very likeable company.

Named for a Japanese poet, the company has long had a great technical reputation and a strong sense of style and panache in this often too-nerdy industry.


Basho was founded in 2008 by a group of engineers and executives from Akamai Technologies with the goal of creating a new database platform that offers extreme high-availability, low latency, linear scalability and a decentralized architecture that would be easy to use and manage.

I wanted to preface this by saying I have no special or insider information about the company, and that this news analysis is largely conjecture based on available public information reported by The Register, on Wikipedia, on Linkedin and on Cruchbase.

Another caveat is that this piece contains logical conjecture about the operations of a privately held company.

I strongly encourage you to do your own research and draw your own conclusions, as mine may be wrong. I also want to say that I work for Hazelcast which also plays in the NoSQL market, although we would not consider Basho/Riak to be a direct competitor. Sure it’s possible to do some similar things with both products, but we have not encountered Basho/Riak as a commercial competitor in our business much, we mostly compete against Oracle Coherence, and Pivotal Gemfire, and to a lesser extent, Software AG Terracotta.

With these caveats in mind, please have a look at my analysis. I am very open to any evidence-based logical arguments that support or disprove any of my conjectures.

So what is happening at the company?

Today, The Register reported that the CEO, CTO and Chief Architect have either left or are planning to leave the company.

This is quite a lot of executive turnover.

So what is the underlying story of this? As a caveat the rest of this story is speculative. But it’s based on the evidence that I will provide here.

What is the history of Basho?

The history of Basho is easy to see for yoursef on Crunchbase.

basho-transparent-vertical-logo Screen Shot 2014-03-11 at 7.50.56 AM


First observation: these are somewhat unconventional venture capitalists in the deal.

Screen Shot 2014-03-11 at 7.52.57 AM

Chester Davenport led the latest round of series F which was the 11.5M deal deon in 2012.

The majority of the F round $6.1M of this  came out of Japan from IDC Frontier, a subsidiary of Yahoo Japan as reported in TechCrunch.

In 2011 the company raised 7.5M from Trifork. There are no Trifork board members. The board consists of Mr Davenport, Earl Galleher (founder),Robert L. Reisley Co-Founder and Managing Director of Evergreen Industries, LLC, Atsushi “Ash” Yamanaka General Manager, IDC Frontier Inc. and Anthony S. Thornley Director, Callaway Golf.

The board hired Donald Rippert as CEO in June 29th 2011. Mr Rippert is clearly an operational guy, having previously worked for Accenture as its CTO for seven years (Linkedin Profile Here).

Since Trifork came in in Feb of 2011, it seems clear that Trifork encouraged or sought the help of an operational CEO to build the Basho business.Screen Shot 2014-03-11 at 8.05.38 AM

Mr. Rippert was CEO of Basho for 1 year and four months until October 2012. He is currently employed at IBM.

Who was the new CEO of Basho after that?

The CEO hired in November of 2012 was Greg Collins.

If you look at the funding history of the company, a new CEO was again hired four months after a new round of funding, this round being led by Georgetown Partners and Mr Davenport.

Based on his job history, he is *NOT* an operating CEO. My conjecture is, that he was hired to sell the company. This is the kind of experience he demonstrated as a principal at Cape Fear Advisors and in previous roles (Linkedin Profile).

Screen Shot 2014-03-11 at 8.08.12 AM

So what happened?

This part is conjecture again. The rhythms of Mergers and Acquisitions are often complex and involve multi-party transactions.

Given the strategic and corporate development strength of Mr Collins, he most likely was working on such a multiparty transaction. The departure of such a CEO after 1 year and 3 months suggests that a large transaction promised to the board failed to materialize.

My personal comment is that none of this is any reflection on Mr Collins, deals of sufficiently large size often have a 50/50 chance of happening due to the probability of buyers doing due diligence on other options including buying other companies or even not buying any company.

So what is going to happen?

Linkedin shows 107 employees at Basho Technologies. If you assume a fully loaded cost per employee of $150k USD, this results in a burn rate of over $16M USD per year, not including the costs of facilities, marketing and other expenses.

This is a difficult piece to write, as I have been an admirer of the company and I personally wish all of these employees well, but if you do the math, they last raised 11.5M in 2012, and their burn rate must be in excess of $16M a year. The unknown variable is the total revenue from operations.

What does this mean for the NoSQL business?

The NoSQL market is alive and kicking. It seems to me that given multiple CEOs each lasting less than a year and a half and each riding on new investor money, that this has been tough for the company. I think the lessons in this story, including conjectures, are more particular to this company than to the industry as a whole.


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Miko on Slashdot: Data Science is Dead

Original piece here

Data Science is dead.

Science creates knowledge via controlled experiments, so a data query isn’t an experiment. An experiment suggests controlled conditions; data scientists stare at data that someone else collected, which includes any and all sample biases.

Now, before you drag out the pitchforks: I’m not a query hater. You won’t see me standing outside the Oracle Open World conference with a sign that says “NO SQL” on it. Queries are fine. Smart people don’t always have the right answer, but they need to ask the right questions. Yes, building a query is like “forming a hypothesis,” but at that point we enter the realm of observational or “soft” science. Yes, by this standard, Astronomy and Social Sciences are also not sciences. I have no idea what Computer Science is, but no, it’s not a science either.

Oh what’s that? Your kind of “Data Science” includes things such as A|B Testing, and your “experiments” actually involve executing designs that affect the world? Allow me to retort: that’s not Data Science, that’s actually doing a job. You might have a job title like Product Management or Marketing. But if your job title is “Data Scientist,” you are effectively removing yourself from the actual creation of data.

I do sympathize. I appreciate that it’s no longer sexy to be a Database Administrator, and I guess the term “Business Analyst” is a bit too 1980’s. Slapping “Data Warehousing” on a resume is probably not going to land you a job, and it’s way down there with “Systems Analyst” on the cool-factor scale. If you’re going to make up a cool-sounding job title for yourself, “Data Scientist” seems to fit the bill. You can go buy a lab coat from a medical-supply surplus store and maybe some thick glasses from a costume shop. And it works! When you put “Data Scientist” on your LinkedIn profile, recruiters perk up, don’t they? Go to the Strata conference and look on the jobs board—every company wants to hire Data Scientists.

OK, so we want to be “Data Scientists” when we grow up, right? Wrong. Not only is Data Science not a science, it’s not even a good job prospect. In the immortal words of Admiral Akbar: “It’s a trap.”

These companies expect data scientists to (from a real job posting): “develop and investigate hypotheses, structure experiments, and build mathematical models to identify… optimization points.” Those scientists will help build “a unique technology platform dedicated to… operation and real-time optimization.”

Well, that sounds like a reasonable—albeit buzzword-filled—job description, no? There is going to be a ton of data in the future, certainly. And interpreting that data will determine the fate of many a business empire. And those empires will need people who can formulate key questions, in order to help surface the insights needed to manage the daily chaos. Unfortunately, the winners who will be doing this kind of work will have job titles like CEO or CMO or Founder, not “Data Scientist.” Mark my words, after the “Big Data” buzz cools a bit it will be clear to everyone that “Data Science” is dead and the job function of “Data Scientist” will have jumped the shark.

Yes, more and more companies are hoarding every single piece of data that flows through their infrastructure. As Google Chairman Eric Schmidt pointed out, we create more data in a single day today than all the data in human history prior to 2013.

Unfortunately, unless this is structured data, you will be subjected to the data equivalent of dumpster diving. But surfacing insight from a rotting pile of enterprise data is a ghastly process—at best. Sure, you might find the data equivalent of a flat-screen television, but you’ll need to clean off the rotting banana peels. If you’re lucky you can take it home, and oh man, it works! Despite that unappetizing prospect, companies continue to burn millions of dollars to collect and gamely pick through the data under respective roofs. What’s the time-to-value of the average “Big Data” project? How about “Never”?

If the data does happen to be structured data, you will probably be given a job title like Database Administrator, or Data Warehouse Analyst.

When it comes to sorting data, true salvation may lie in automation and other next-generation processes, such as machine learning and evolutionary algorithms; converging transactional and analytic systems also looks promising, because those methods deliver real-time analytic insight while it’s still actionable (the longer data sits in your store, the less interesting it becomes). These systems will require a lot of new architecture, but they will eventually produce actionable results—you can’t say the same of “data dumpster diving.” That doesn’t give “Data Scientists” a lot of job security: like many industries, you will be replaced by a placid and friendly automaton.

So go ahead: put “Data Scientist” on your resume. It may get you additional calls from recruiters, and maybe even a spiffy new job, where you’ll be the King or Queen of a rotting whale-carcass of data. And when you talk to Master Data Management and Data Integration vendors about ways to, er, dispose of that corpse, you’ll realize that the “Big Data” vendors have filled your executives’ heads with sky-high expectations (and filled their inboxes with invoices worth significant amounts of money). Don’t be the data scientist tasked with the crime-scene cleanup of most companies’ “Big Data”—be the developer, programmer, or entrepreneur who can think, code, and create the future.

Miko Matsumura is a Vice President at Hazelcast, an open source in-memory data grid company. He is a 20-year veteran of Silicon Valley.

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Deflating the Hype Over In-Memory Databases: How Oracle 12c and SAP HANA got the Future Wrong

Deflating the Hype Over In-Memory Databases (via slashdot)

Moore’s law has doubled transistor density on both RAM memory and processors since the beginning of industrial computing. RAM doubling continues unabated, providing previously unheard-of supplies of main memory. However, we have reached the fundamental…

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Facebook Pays 0.085 Instagrams for Parse to become largest Mobile-Backend-as-a-Service (MBaaS) Provider

The leading vendors in the MBaaS space ordered by viability/stability just got shuffled.


My previous post detailed a whole slew of Mobile-Backend-as-a-Service (MBaaS) Vendors who had all raised less than 1M in venture capital and predicted that those small MBaaS vendors would be caught in the “Series A Crunch” This post has turned out to (so far) accurately predict that none of these vendors would be able to raise any more money.

The small ones on my list included: Cloudmine,FatFractalApplicasa (500k)CloudyreciKnodeScottyAppQuickBlox and others

The vendors called out in the “Safe Zone” were  Kii (profitable),  Stackmob (7.5M)Kinvey (7.02M) and Parse (7M). My direct source in Silicon Valley reports that Parse was raising a significant round of Venture Capital when it decided, instead, to take the acquisition offer from FaceBook.

Given the burn rate, organizational size and growth of this space (as well as the validation of the exit potential of this space), the other “Safe Zone” vendors should have no trouble raising additional capital and we should expect to see several announcements of this sort coming soon. We expect those who raised around 7M should have burnt through most of it by now. Linkedin shows a Kinvey of about 20 people, and a Stackmob of about 29 people.

So the list now puts Parse at the top of the vendor viability equation in MBaaS… However, with the Facebook acquisition comes a lot of questions.

Here are the the data points we have collected from reputable sources:

* The rumored amount of the transaction was 85M
* Facebook rep was quoted as saying the sum was “Not Material” (they wont file an 8K with the SEC)
* Total amount of VC raised by Parse was about 7M
* 85M exit is consistent with the kind of returns VC would expect
* I spoke to a VC who was planning to invest in their large B round
* Obviously they didnt raise a round but chose to go with FB
* There must have been other bidders, hence the VC Exit level pricing
* Illiya said that they liked FB the best for executing their plans
* 85M equals 0.085 Instagrams for Facebook
* This price puts them into mixed territory–it’s not exactly an
acqui-hire but also not an instagram either
* Both parties claim that the service will continue uninterrupted
* We’ll see about this
* This is a very different business model from what FB is used to
* Linkedin shows the company to be about 12 people, maybe more

So what does this mean?

1) Validation for the MBaaS space: this will grease the skids for
Stackmob and Kinvey to raise big rounds or to exit at a neighborhood
multiple, say about 40-60M each

2) Further investment for smaller players: I think not. I think the
smaller players will continue to scratch in the desert–however,
smaller players *WILL* experience acqui-hire by bigger players

3) Facebook is probably not sure what’s going to happen, but it seems
sure that MOBILE is a huge deal, DEVELOPERS are also a huge deal and
they are aggressively trying to flip the company in that direction.

4) If Facebook doesn’t squash these entrepreneurs (at 85M in probably
mostly stock, it’s not above company politics) then it puts them in
direct competition with Amazon, Heroku, Google and Apple. Add in
FaceBook Home and also Instagram and it does put them in Google and
Apple Land.

In terms of consolidation: I expect that this will drive some of the big players to make acquisitions, but this was an unusual deal. I would expect some of the smaller vendors to be acqui-hired over the next six months by the likes of Google, Apple, Amazon, Heroku and other big cloud providers. An orthogonal app/platform provider with momentum might also do an all stock acqui-hire like maybe a Yahoo, Box.com or an Evernote.

The big message is that the MBaaS space is validated big time and we’ll see a lot more excitement in the upcoming year in the form of financing, M&A and other big announcements.

Disclosure: Miko works for Kii Corporation, one of the vendors mentioned in this article.

Update: This just in… FeedHenry (an MBaaS vendor that did not make my “safe” list nor my “small” list just raised $9M in venture capital. Feedhenry is squarely in the Enterprise market and is focused on HTML5 JavaScript CSS write once run anywhere code not unlike Appcelerator or Sencha. So it appears that the market is starting to segment into consumer facing and enterprise facing MBaaS.

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