It appears that more consolidation is on the way for the analytics ecosystem. An anonymous insider has told VentureBeat that SAP SA is in the final steps of closing a $125-million-plus agreement to acquire Altiscale Inc., a Palo Alto-based startup that provides managed data processing services.

The outfit started out in 2012 with a hosted implementation of Hadoop and later added a premium edition called Altiscale Insight Cloud that layers business intelligence functionality on top of the system. Both services’ main selling point is that they remove the need for organizations to set up and maintain the infrastructure powering their analytics efforts. As a result, the deployment process takes less time and data scientists can get to work faster, while administrators don’t have to worry about updating their environments every time a new software component is available.

SAP presumably plans to integrate Altiscale’s services into its cloud-based analytics portfolio, which is based on its in-memory HANA database. The system has some limited functionality for analyzing unstructured data but is a relational store at its core.

Making a hosted Hadoop implementation available to customers should help fill the functionality gaps in the software giant’s lineup and allow it to target a whole new set of use cases that it wasn’t able to support before. SAP could make such a one-stop-shop value proposition especially appealing by hooking HANA into Altiscale’s technology so that records can be moved back and forth in different stages of the analytics lifecycle.

If the vendor approaches it correctly, then the acquisition could go a long way toward leveling the playing field against rivals IBM and Oracle Corp., which both already offer an extensive set of cloud-based tools for processing unstructured data. And Altiscale meanwhile gets to provide a hefty return to its investors, which poured $42 million into its coffers over the last four years.

The market is contested not only by startups like Altiscale but also Amazon and Microsoft, which boast major advantage thanks to the popularity of their respective public clouds. Trip Chowdhry of Global Equities Research noted in a report today that both providers are seeing demand for their Hadoop services rise at over 100 percent year-over-year.

But while this will be much less of a concern for Altiscale following its absorption by SAP, other Hadoop hosting providers such as Qubole Inc. may have a tough road  ahead.

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