IBM will acquire data warehouse appliance vendor Netezza in a cash deal worth about $1.7 billion, company officials announced today.
Big Blue says the Marlborough, Mass.-based Netezza will greatly enhance its business analytics offerings, helping customers deploy business analytics faster and with less effort.
"The addition of Netezza will reinforce IBM's focus in understanding clients' needs by providing them a broader set of analytics capabilities and bringing the power of analytics right into the hands of business users at every level within an organization," said Arvind Krishna, general manager of IBM’s Information Management division.
Founded in 2002, Netezza made a name for itself selling high-speed analytics capabilities within relatively easy-to-deploy data warehouse appliances, according to IT industry analysts. Netezza already designs its appliances on IBM hardware and has been an IBM partner for several years, company officials said.
“IBM makes the blades that Netezza appliances are built on, so there is a really strong technical understanding between the two companies,” said Merv Adrian, founder and principal of IT Market Strategy, a Pleasanton, Calif.-based consulting firm that focuses on BI, analytics and data management issues.
IBM offers two data warehouse appliances of its own -- IBM InfoSphere Balanced Warehouse and the IBM Smart Analytics System – which compete with Netezza’s flagship data warehouse appliance, called TwinFin. Netezza also sells a slimmed-down appliance for departmental deployments, called Skimmer.
Adrian said the IBM-Netezza deal is the latest in a string of acquisitions by software vendors looking to add high-speed analytics capabilities to their portfolios. This year alone, EMC acquired Greenplum Software and Teradata acquired Kickfire.
“I’m sure we’re going to see Vertica, Aster and […] Kognitio all in play in the next 12 to 18 months,” Adrian said. “There is a lot of need for a quickly implemented [data warehouse appliance with a] high analytic capability [and] high usage profile. We’ve seen in the last year or two a lot of those things sold. These new guys are finding great interest in what they’re offering.”
Jim Kobielus, a data management analyst with Cambridge, Mass.-based Forrester Research Inc., wrote in a blog post that the IBM-Netezza deal is in part an attempt to fend off database and business applications rival Oracle Corp.
“IBM’s acquisition of Netezza was a must for both vendors if they wish to grow their shares of the data warehousing market,” Kobielus wrote. “They have a common arch rival, Oracle, that is fielding an increasingly formidable appliance-based product portfolio, threatening both vendors’ long-term positions in this dynamic market.”
IBM expects to close the deal, which is subject to shareholder and regulatory approval, during the fourth quarter of 2010. The company did not say whether it would retain Netezza’s approximately 500 employees.