1010data VP Sandy Steier spoke with 451 Group analyst Matt Aslett recently.    The update resulted in this 451 Market Insight report: 1010data positions itself for growth with funding infusion (you need to be a subcri.ber to read the full report).  We liked the report, and think Matt did a good job of describing 1010data.  The excerpts from The 451 Take section provide a nice wrap:

1010data admits that despite being in business for 10 years and having built up a sizable customer base, it has still been operating with the mindset of a stealth-mode company and needs to raise its profile. We would agree with that, and also with the contention that general industry trends are beginning to favor the company’s distributed technology and its approach to enabling the ad hoc analysis of raw data…

This approach reduces the time taken to get up and running with the 1010data services, while the company maintains that its performance is such that the need to cleanse data for each query is not a significant impact on query times (while for regularly repeated queries data marts or saved views can be created). While this approach would previously have been considered unusual, the trend toward big data processing and self-service analysis of a company’s raw data is playing to 1010data’s strengths. This is also true given its 1010Vision Web-based UI, which provides a spreadsheet-like display for ad hoc analysis designed to complement traditional BI and analysis tools.

I originally was ambivalent about attending the recent TDWI conference in San Diego.  What with my usual workload, the cross-continental flight, the jet lag, the perfect San Diego weather – wait, scratch that one – I was a bit torn.  But as it turned out I had a great time.  I was busy from morning to night, and had a lot of good conversations with analysts and possible partners and customers.  Booth traffic was good, and some of the people were quite thoughtful, interested and impressed.

It is interesting how many people came to the booth who were analysts, potential partners or vendors, i.e. people who were not customer prospects.  This supports my view that TDWI is as much a networking event as a sales event.

I audited several classes, including part of Cindi Howson’s session on BI tools.  Her talks are always interesting in that she gets into a lot of detail about the various products on the market.  In this case she hosted a bakeoff between three BI vendors, who showed how to apply their products to a test dataset.  (Not to take away from the other participants, but I thought Information Builders did particularly well.)

Below, I include links of others who posted about the show, and conversations with me:

Technology Evaluations Centers, Notes from the TDWI Conference in San Diego, (Day 1)

BeyeNETWORK, Hide Not Your Talents – Transparent Databases

Enterprise Irregulars, More TDWI Notes

IBM invited about a dozen bloggers in to talk about the company’s progress in analytics recently.  The Outsourced blog featured a post on this.

Blogger Rahul Jain describes how he suddenly understood as a result why the topic of analytics is so hot at IBM and with other major vendors.  Rahul writes:

..the appeal of analytics becomes clear. Balboni noted one bank started with IBM to improve analytics. After the business got the first taste… every division wanted similar capability. Naturally that demand warrants more processing cores and servers. Overwhelmed with the data? IBM has services to help you. Need a presentation layer? Check out Cognos. Need some newfangled approach—check out research. Pick your vendor—SAP, HP, Oracle, whoever—and there’s a similar stack of stuff that all ties into analytics somehow.

The analytics push—some vendors will be more talk than reality—creates a virtuous cycle for IT giants. It’s no wonder that analytics, data centers, software implementations and servers all go hand in hand. If you’re a systems provider—IBM, HP and Oracle—the appeal of analytics is never-ending. Why? The IT department has to provide the infrastructure to support analytics.

It is a shrewd observation, and true in our opinion. Fortunately, cloud-based solutions are available that reduce or eliminate the need for all the technology and process.  Rahul would seem to agree with this, and concludes:

But as analytics becomes more important it’s easy to imagine enterprises handing infrastructure off either through cloud computing or outsourcing/hosting arrangements. Analytics has the potential to create a never-ending upgrade cycle and at some point you’re going to get tired of building infrastructure.

Automatic software upgrades are an often ignored advantage of cloud-based solutions.  The service provider handles all software installation and upgrades and the customers focus on using continuously improving software to analyze their data.

Chris Dixon, founder of Hunch (a startup  focusing on recommendation engines) wrote a blog post entitled Graphs. It is about networks and social graphs.  As Chris says:

It has become customary to use “graph ” to refer to the underlying data structures at social networks like Facebook. (Computer scientists call the study of graphs “network theory ,” but on the web the word “network” is used to refer to the websites themselves).  A graph consists of a set of nodes connected by edges. The original internet graph is the web itself, where webpages are nodes and links are edges. In social graphs, the nodes are people and the edges friendship. Edges are what mathematicians call relations . Two important properties that relations can either have or not have are symmetry (if A ~ B then B ~ A) and transitivity (if A ~ B and B ~ C then A ~ C).

He goes on to discuss different ways people connect on networks like Twitter and Facebook, for example, and the implications of this.  When people and information are connected over networks, data about relationships can result.  He continues: Over the next few years we’ll see the rising importance of other types of graphs. Chris lists the various types of graphs such the Taste graph, which Hunch is developing, financial trust, endorsement, and local (think FourSquare), and concludes:

Besides creating graphs, Facebook and Twitter (via Facebook Connect and OAuth) created identity systems that are extremely useful for the creation of 3rd party graphs. I expect we’ll look back on the next few years as the golden age of graph innovation.

At 1010data, we are very much attuned to topics about data.  We think Dixon is on to something big here, and will stay tuned to these ideas and to Hunch.  These graphs produce a tremendous amount of data – data which could be used in the future to power business uses above and beyond the applications listed, limited only by our imaginations and ability of technology to make sense of the data.

The  2010 Gartner Hype Cycle report for data management is now out.  For the uninitiated, these reports track the trajectory of technologies as they are introduced and adopted (and fall by the wayside, in some cases).  The Gartner report identifies twenty-seven technologies, techniques and concepts that, in Gartner’s view, comprise the latest trends in data management.

We are pleased that 1010data is called out as a sample vendor not once, but twice (in the categories: database as a service, or DaaS, and columnar databases), both areas that are gaining traction and respect, according to the report.

The report assigns a separate category for DaaS, as distinct from cloud-based DBMS.  According to Gartner,

“To be considered as a DaaS, the provider’s services must include some database management system (DBMS) and database support, such as database administration. Some vendors may optionally offer additional services such as data integration and data quality…This is different from a DBMS as a cloud service, where the DBMS is available as a service in the cloud only, and the database must be defined and set up by the user.”

Anyone familiar with 1010data will recognize the former – DaaS – as the model that we pioneered.  The following excerpt is also extremely relevant.

“As more options become available, the speed of adoption will increase for the vendor-hosted implementations. In general, DaaS will mature in a shorter time frame than we saw with applications such as software as a service (SaaS), since many of the lessons learned in SaaS implementations will be leveraged in the implementation of DaaS. Based on the cost avoidance and savings experienced in the SaaS market, DaaS solutions are expected to deliver similar cost-benefit models. Those solutions available today are increasing in customer acceptance, as evidenced from our customer interactions, and will continue to gain in popularity as customers realize that they offer cost savings and more rapid deployment than may be available from internal IT…According to our customer references, the DaaS vendors receive the data and perform all the necessary tasks to create the data warehouse and make it accessible to the client.”

Gartner does not specifically mention scalability and enterprise data warehouses in this context, however readers of this blog know that this type of service can in fact scale and support EDW deployments (see the post Cloud-based Analytics: Billions and billions of Rows Served).

The report does say that,

“…as DaaS matures during the next two to five years, it will be possible for an organization to host the entire DBMS infrastructure as DaaS, with potentially far reaching reductions in the cost of servers, storage, DBMS licenses, maintenance and support, storage management and database administration.”

The fact that 1010data uses a columnar database is incidental, as our clients needn’t concern themselves with the back end, nonetheless Gartner correctly mentions 1010data as an example of vendors that use columnar databases, and says that the technology is “climbing the slope” with a “benefit rating” of “high.”

CNBC’s Steve Liesman reports that big changes may be in store for the banking system in his story, Who Would Finance Mortgages If Fannie, Freddie Disbanded?

We all understand that, while banks write mortgages, it’s the mortgage-backed securities (MBS) market that helps make the current system work.  If you take away the guarantee that comes with an agency mortgage (i.e. Fannie Mae or Freddie Mac) the system can fall apart.  And, as Steve notes in his article:

…without the guarantees, experts say, there would be no securitization, no capital from the rest of the world for long-term fixed rate mortgages and banks would have to hold on to them.

Setting aside the issue of desperately needed structural change at the GSE’s, we have to agree with the statement and these experts.

Of course, without securitization, consumer interest rates would revert to where they otherwise most likely would be… several points higher.  What this would mean is lower home values at less affordable interest rates.

I think part of the issue is that the government has taken a paternalistic stance towards home ownership and firmly believes that, as a society, home ownership brings greater social stability.  But if you look at Europe, where there is no government-sponsored entity to promote housing affordability, home ownership is much lower.  They have a society of renters.

The question here is really whether a nation of renters is worse than continuing to allow the government to subsidize home ownership for all with our tax dollars (and absorb the subsequent massive losses).

What do you think?  Should we end government guarantees?

As I mentioned in my last post, 1010data exhibited at the Global ABS 2010 conference in London earlier this month.   The show covered a wide range of topics related to securitization.  We had many productive conversations, and gained a better understanding of issues that are important for the European market.

As readers of this blog know, one of the hot buttons for 1010data is transparency, or rather the lack of it.   You may recall the recent post about our letter-writing campaign (Can You Hear us Now, Tim Geithner?), which aimed to drive improved transparency into the mortgage pools of the major agencies here in the U.S.  One thing we learned at Global ABS that made us feel at least a little better is that, as opaque as it can be here in the U.S., there is even less transparency in Europe.

There are probably many good reasons for this.  There are no publicly-backed lending institutions comparable to Freddie Mae and Fannie Mac for the European Union – or even in individual E.U. countries.  There is less homogeneity across Europe; the laws that govern banking can be more complex and vary from country to country.  Rules about privacy of data can vary as well, making it harder to make information that can lead to improved transparency more widely available.

The upshot of all of this is that investors in mortgage-backed securities really have nowhere to turn when it comes to having the data and analytical tools that can help them better understand the risk inherent in mortgage pools in Europe.  We know there is a desire for access  to this type of data, as we have spoken directly with European investors about this.

There is a ray of hope on the horizon, and some in Europe are pushing for improved transparency.  E.g., the Bank of England is making waves about the release of data – see this article which ran earlier this week in the Daily Mail, a U.K. publication.  It says:

Between now and the end of 2012, British banks need to refinance-750 billion of loans. The Bank wants as much of that as possible to come from domestic investment institutions with low borrowings, rather than from highly-geared, foreign investors making short-term investments.

But the Bank fears this will not happen if domestic investors lack confidence in the reporting of financial institutions.

A spokesman for the British Bankers’ Association said: ‘ British banks fully understand the need for transparency and are committed to the highest possible accounting standards.’

Last week was a big one regarding topics that are important for 1010data, such as analytics, the asset-backed securities business, and cloud computing, especially as theses areas relate to Europe.

1010data exhibited at the Global ABS show in London and we will soon have a separate post about this.

Also, TDWI had their annual event in Munich last week (we were not there, but did attend TDWI’s U.S. conference several months ago).  The theme for the Munich event was ”Business Intelligence and Data Management in a Cloud Computing Environment.”

In its wake Mike Ferguson, an authority and TDWI speaker, wrote a nice post: Cloud-based BI – Understanding the Options is the Biggest Barrier.  He writes about the main points covered by his presentation, and notes:

Bear in mind that both public cloud and private cloud based BI were under discussion even though the hype seems all around public cloud or externally hosted BI systems.

He then goes on to list the various options for those that want to leverage the cloud for BI:

1.     Public cloud based IaaS for a BI system

2.     Public cloud or externally hosted BI/DW PaaS for building your own cloud-based BI system

• Multi-vendor or single-vendor BI PaaS offerings

3.     Public cloud or externally hosted SaaS BI packaged analytical applications

4.     Public cloud or externally hosted SaaS BI for operational reporting on cloud based operational data

5.     Private cloud based BI system running internally

6.     Dedicated hardware based BI system (this is what most companies have today)

The actual post provides more info on each option.  1010data would appear to fall into number 2, although in many ways our approach is not easily comparable with others as we have been a pure play, purpose- built cloud solution from our earliest days.  E.g. we are not forcing people to build their own multi-vendor system but instead provide integrated analytics and the back-end database in a turn-key, externally hosted solution.

This blog is all about data.  We like to focus on ways in which people can better understand their data, and on the trends that are shaping the future of data analysis.  This generally relates to topics about data warehousing, analytics and business intelligence.  Sometimes it is nice to take a break from the usual topics and focus on fun stuff too.   On that note, the Flowing Data blog had a great post last week called Data Life of the Future.  Nathan Yau writes:

It’s fun to imagine the future. Every few months, someone takes a stab with a concept video or a proof of concept prototype, providing a glimpse into human-computer interaction and data visualization in a decade or two. What will it really look like? It’s anyone’s guess. But if people’s imaginations are any indication, the future will be filled of data displays and 3-dimensional holographic objects projected into physical space.

He goes on to list future concepts related to data, accompanied by predictions from leaders such as Microsoft, and stunning photos and video.  For example, Yau discusses embedded data:

If there’s anything uniform across all the ideas, it’s ubiquity. In the future, computers won’t feel like computers, and data will not just flow alongside the physical world. Instead, data will intertwine with your day-to-day like threads in a fabric.

The picture shown below provides an example of this.

Please pardon the interruption from our regularly scheduled topics on BI and analytics and allow us to vent a bit.

As those who read this blog probably know, 1010data, the company behind The Future of Data, does lots of work in the mortgage industry. We provide mortgage and asset-backed securities participants with data, analytics and ad hoc query tools to recognize and respond to changing market dynamics. As such, we think that our unique perch gives us an excellent perspective on the mortgage business – an area that has undergone much scrutiny in light of the devastation caused by the mortgage market meltdown over the past couple of years.

Despite all the hard work of the Obama administration, the Bush administration before it, and the banking industry to fix the mess, and the progress achieved so far, there is one area that has been ignored. It may a be a bit harder to understand, and doesn’t come with the broad strokes or headline-grabbing potential of a bailout. Yet there exists a relatively simple way to drive specific and concrete improvements in the mortgage business and housing market – and this fix has been ignored by Treasury Secretary Tim Geithner, as well as members of the House Financial Oversight Committee, despite our pleas.

Let us explain. To do their jobs well, traders of mortgage-backed securities need to understand the mortgages bundled into these securities. Mortgage securities can have vastly different risk profiles despite looking very similar when data about each of the loans in the pool are available only at an aggregate level.

Today, widely available technology lets you get down to the lowest level of detail for non-Agency mortgages – i.e. to explore individual loan and borrower data (without revealing identifying information). This sheds light on the composition and risk profile, of the mortgage pool at hand and helps traders and risk managers adjust strategies based on the likelihood of loan defaults and prepayments, and helps loan originators like banks track the effects on loan performance of changes in underwriting standards as they seek to improve their practices.

Unfortunately, for no good reason that we can see, this type of detailed loan-level data continues to be withheld from the investment community, and from the American public at large (whose tax dollars, in fact, pay for the Agencies). The Agencies provide liquidity for three quarters of the residential mortgages in America, yet they provide data only at an aggregated, pool level – frustrating efforts of the mortgage securities industry to better understand the health of these pools. Improved transparency via loan-level data is critical for mortgage bond investors, and has a direct impact on the price and availability of mortgage credit for consumers.

Months ago we wrote letters to Tim Geithner and members of the aforementioned House committee. We even offered our services and technology, at no cost to the Agencies, to make the data available. We have not received a single response. We are hoping that if we (and you) call, Mr. Geithner would pick up the phone and hear us now.

Please, take a moment to contact the Department of The Treasury to share your thoughts.