Hitachi buying Pentaho to boost its IoT business

"Hitachi owns the infrastructure and Pentaho owns the data integration and analytics platform and know-how to harness the value in big data," wrote Pentaho CEO Quentin Gallivan in a blog post detailing the rationale behind the acquisition.

Hitachi Data Systems (HDS) is a wholly owned subsidiary of global conglomerate Hitachi, and focuses on IT and data center support and integration. It has been working to expand into the IoT market, which will generate over $2 trillion in business for all industries by 2020, according to Goldman Sachs.

Hitachi manufactures a wide range of industrial equipment that could be hooked up to the Internet, such as elevators, power distribution systems, and construction equipment. HDS can use the Hitachi industrial products as components to larger IoT systems it can assemble on behalf of customers.

Already HDS has rolled out vertical-industry systems focused on data and networking, such as for connected cards, that collect and convey operational and diagnostic information back to the user and manufacturer. HDS has also worked with the U.K. to outfit commuter trains with sensors to generate more information about train operations.

The Pentaho software will provide the analysis engine to give customers additional information about the systems, based on the data these systems generate. Pentaho software can work with data from a wide variety of sources, including big data repositories such as Hadoop. Because the software is open source, it can be easily embedded into a larger set of services, according to the company. It was also designed to meet the needs of a range of users of different skill levels, including developers, data scientists and business users.

Pentaho can also work with existing Hitachi products, such as the Hitachi Content Platform data storage system. The two companies have already worked closely together through an OEM (original equipment manufacturer) partnership, whereupon Pentaho's software fit into HDS' systems.

The pending Pentaho acquisition shows that large system integrators such as HDS "need integration software and analytics," said Ciaran Dynes, vice president of products for Pentaho competitor Talend. "That big companies are looking to do these acquisitions shows that customers are out there looking for these types of technologies."

Pentaho will continue operations under its current business model. Pentaho CEO Gallivan will report to Kevin Eggleston, HDS senior vice president for social innovation and global industries.

With 6,000 employees, Hitachi Data Systems counts among its customers BMW, NASA, Spanish telecom Telefonica, and the China Mobile Communications Corporation. Pentaho customers include Lufthansa, Halliburton, and Nasdaq.

HDS expects to complete the transaction by June, subject to the customary closing conditions. Financial terms of the deal were not disclosed.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com