How a scrappy young startup plans to turn the massive database market on its ear

May 21, 2014, 9:34 PM UTC
Photo: Toru Yamanaka/AFP/Getty Images

FORTUNE — Name any enterprise application today, and it’s a pretty safe bet that it’s deployed on a relational database management system. Since the 1980s, RDBMS technology has been the go-to solution for storing and retrieving information about almost anything, from finances to widgets to people. Oracle (ORCL), IBM (IBM), and Microsoft (MSFT) are among the companies leading the way; SAP and Teradata are also competitors.

Then big data came along. Newly exploding volumes of data made the limits of existing RDMBSes painfully clear. “Buyers now want, and expect, immediate answers to questions that previously may have taken companies minutes, hours, days to answer,” Bruce Cleveland, a general partner with InterWest Partners, said.

In a consumer-facing business, a buyer may want to know, “Is it in stock?” In a B2B business, the buyer may want to know, “What is your best price?” And they want to know immediately. “With data volumes increasing, companies have had two poor options: Either live with sub-optimal performance or ‘scale up’ their traditional databases using extremely expensive hardware,” Cleveland added.

That’s where Splice Machine comes in. Much the way IBM recently announced a “scale out” storage offering that allows large companies to scale capabilities without massive investments, so Splice Machine aims to do the same thing for large databases.

‘The best of both worlds’

An alternative to today’s RDBMSes, Splice Machine effectively combines traditional relational database technology with the scale-out capabilities of Hadoop, the de facto standard for big data architecture at Yahoo (YHOO), Facebook (FB), and most other major companies. Whereas Hadoop is best known for its power to perform batch analytics, Splice Machine focuses instead on operational applications and real-time analytics.

“Splice Machine is aiming to turn the common wisdom on its head with a solution that combines the best of both worlds: The cost-effective, scale-out performance of Hadoop and compatibility with common RDBMS/SQL processes — such as data cleansing, customer roll-ups and ETL work — and applications like Cognos, Unica, SAS and SPSS,” Charles King, a principal analyst with Pund-IT, said.

Splice Machine’s aim is to convince businesses to replace traditional databases such as MySQL and Oracle with their own, Cleveland said, with promises of high performance, accuracy, and reliability.

“[Businesses] get high performance from scaling out onto clusters of inexpensive servers,” he said. “And because Splice Machine supports native SQL, companies can do this without having to rewrite their applications.”

‘Scalability nobody has been addressing’

Last week, Splice Machine — which was founded two years ago and is backed by $19 million in funding from InterWest Partners and Mohr Davidow Ventures — launched its Hadoop-based database into public beta. Fifteen companies already use the technology, including the San Antonio, Texas-based marketing services company Harte Hanks. Splice Machine said Harte Hanks observed improvement to the ratio of price to performance by more than 10x compared with its existing Oracle RAC databases. (Splice Machine offers the standalone version of its database on a freemium basis for testing; otherwise, it’s $5,000 per node.)

“We think this will disrupt the $21 billion database market,” Monte Zweben, Splice Machine’s co-founder and chief executive, told Fortune.

Previously, Zweben worked at the NASA Ames Research Center; he also founded Blue Martini Software.

“The majority of competitors that are trying to apply this scale-out technology are focused on analytical apps,” Zweben said. “What we think may be more valuable is powering real-time apps, where a concurrent set of users are reading and writing to the database at the same time. That’s scalability nobody has been addressing, and that’s what we do.”

‘A category-disruptive company’

In many ways, Splice Machine democratizes what huge companies “with 50 Ph.Ds and countless Java programmers” can do, said Bill Ericson, a general partner at Mohr Davidow, which participated in the company’s Series A and Series B financing rounds.

“One of the problems with these data-intensive technologies is, they work great if you have really smart Ph.Ds but the average enterprise has limited resources,” Ericson said. With Splice Machine, “the costs are probably 10 to 25 percent of trying to do this with something like Oracle. Users don’t have to buy all new software and all new tools, and not only do they save on the fundamental infrastructure, but they don’t have to throw out the window everything they built over the last 25 years.”

Splice Machine’s model “dramatically changes the economics of scaling databases,” Cleveland said. “One of Splice Machine’s customers had their queries speed up by three to seven times while reducing costs by over 75% compared to their current database solution.”

For InterWest Partners — which participated in Splice Machine’s Series B — the company is “an example of investing in what we believe could be a category-disruptive company,” he added. “Since Splice Machine supports standard SQL, it has the potential to replace — disrupt — the traditional database suppliers by offering a low-cost, high-performance, scale-out database solution without companies having to rewrite their existing applications, which is what the NoSQL and NewSQL companies require in order to use their solutions. With Splice Machine, the same programmers who wrote the existing SQL applications can easily and simply use Splice Machine without any specialized skills or training.”

A potential acquisition target

It remains to be seen whether Splice Machine can deliver on its promises and whether RDBMS vendors have reason to worry, Pund-IT’s King said.

“The answer to the first is found in the accolades of the company’s 15 pilot customers,” he said. “Whether established vendors should be worried is harder to say. Any number of alternative vendors have tried to shake up the RDBMS market without much success to show for it.”

Still, organizations are searching for ways to save money while supporting necessary business applications and processes, King said. Which means Splice Machine could be the subject of much interest.

“If it truly can deliver the goods, the company could do very well,” King said. “[It could] even become an acquisition target by a traditional RDBMS vendor that wishes to capture a bit more big data magic while making life difficult for its competitors.”