From Boom to Bundle: The Great Consolidation of Data Tools

One of the defining challenges of working in the data industry is the sheer volume of tools and technologies available. Over the past decade, as interest in big data and data science surged, investment in data solutions followed. We went from venture capitalists (VCs) backing companies like Cloudera and Hortonworks to modern tools like dbt and Fivetran.

This rapid expansion has made the ecosystem more crowded every year. A great example is the MAD (Machine Learning, Artificial Intelligence, and Data) Landscape that Matt Turck and his team put out annually. Each iteration of this landscape is a testament to the growth and complexity of the space, where identifying a single logo among hundreds becomes difficult.

Lately, though, I’ve been hearing more and more people in the data space talk about consolidation. There’s only so much room in the market: a limited number of customers, talent, and demand for these tools. And with the end of zero-interest rate policies (ZIRP), it’s getting hard to secure funding for future rounds.

On top of that, the new U.S. administration seems more open to mergers and acquisitions (M&A), which means we could see a wave of consolidation in the next couple of years.

I wouldn’t be surprised if companies like Meta and Amazon started buying up some GenAI companies. It’s already happening in the startup world—just look at the recent acquisitions of SDF Labs, Upsolver, Rivery, and Quary. If this is any indication of what’s to come, it looks like we’re off to a strong start this year.

In this article, we’ll discuss these acquisitions, what they mean for the industry, and what other experts are saying about this growing trend.

What’s the Impact of Consolidation?

When companies merge, it’s easy to see both the good and bad outcomes. After all, some acquisitions are major wins—like Instagram—while others fade into obscurity, much like Mint.

To dig into this, I wanted to share some insights from a data leader who preferred to stay anonymous. Once you hear their perspective, you’ll understand why.

“I have mixed emotions on the latest acquisitions. Tool consolidation makes sense, and it’s not unusual for a startup to get acquired by a large company. It's also much better than startups going out of business. So, I am happy for friends who work at these companies.

As a customer, I’m cautious. Looker is a great example of an acquisition that didn't work out so well for some customers. If you’re not on BigQuery, you’re stuck with no new features and very poor support. And when you ask for something, they aggressively push you to move to BigQuery.

For Upsolver <> Qlik, the first thought I had was "oh no." Qlik has never been on my list of tools to evaluate. And from what I’ve heard from others, it's expensive and not all that great. They also already have Talend, and I believe they bought an EL company a while back. Will Upsolver thrive there? I am not so sure.”