Another week and another IBM (news, site) deal. This time Big Blue continues to splurge in the analytics market with the acquisition of its long-time strategic partner Netezza for US$ 1.7 billion, which brings high-performance analytics to its already considerable analytics stable.
Netezza specializes in analytics that can deal with large volumes of company information and produce enterprise-ready analytics up to 100 times faster than other systems currently on the market.
While there have been some questions over how other recent acquisitions would integrate into the IBM portfolio, with Netezza there should be no real difficulties.
IBM and Netezza
Netezza already builds, designs and develops its software on IBM technology and in some instances the two combined provide a basis for many enterprise applications including integrated systems, software and storage for analyzing vast amounts of complex data.
With the levels of data now available to enterprises through structured and unstructured channels, analytics is quickly becoming one of the most desirable technologies to have on site. After all what good is data if you can’t draw lessons from it.
For IBM, with this acquisition it will not only offer analytics at a very high level, but it will also be able to offer it enterprise wide, across all departments and be able to offer analysis of huge amounts of data.
This is not the first time though that IBM has made a foray into the Big Data arena. In May this year it launched IBM Info Sphere BigInsights, which moved analytics up a notch by enabling them to analyze petrabytes of data using Apache Hadoop, an open source technology developed specifically for the Big Data end of the datasphere.
With Netezza appliances it will be able to cut the time needed to analyse that data. And it is that ability that has enabled it to capture clients like NYSE Euronext, which uses the Netezza appliances to reduce analytics runtimes from hours to seconds.
IBM, Analytics and Acquisitions
When IBM finally closed the deal on NICS earlier this year it made no bones about the fact that it wanted the number one spot in the business analytics space.
Since 2006, IBM has been very busy buying in the analytics marketplace and has invested more than US$ 12 billion in it to buy 23 companies resulting in a growth of 14% in Q2 of this year alone.
As well as NICS, the development of their analytics capabilities includes the acquisition of Cognos three years ago and SPSS in 2008.
And there have been other acquisitions too like Coremetrics in June, which brought social media analytics for an unknown price, Unica in August, which added more predictive analytics for marketing with a price tag of US$ 480 million, and of course the many other acquisitions that will add to its analytics software without actually being part of that business directly.
IBM’s Shopping List
And there are likely to be other acquisitions. In May this year, CEO Sam Palmisano said IBM intends to spend a lot more on buying new companies -- about US$ 20 billion -- and double its profits over the same period.
While Palmisano said that IBM's principal target would be to develop its software business across emerging markets which he said would account for 25% of its revenue, that wouldn’t stop him buying an analytics company like Netezzo if the price was right.
Obviously US$ 1.7 billion was the right price and the deal is now expected to close by the end of the fourth quarter after which Netezza will be integrated into IBM's Information Management software portfolio along with its 500 employees.