IBM to Buy Netezza

— October 05, 2010

IBM has announced its intention to acquire Netezza Corporation for net price of approximately $1.7 billion, after adjusting for cash.

The move is aimed at accelerating IBM's business analytics portfolio, which serves one of the fastest growing segments in the overall IT industry with a market opportunity of $100 billion by 2010. IBM CFO Mark Loughridge recently cited analytics as a key growth driver for the company with $16 billion in projected revenue for business analytics by 2015. 

IBM reports that is taking analytics mainstream: It's no longer just the CIO -- every department from finance to marketing professionals is tapping into analytics to draw meaningful insights for business success. IBM reports that Netezza's technology will it bring the power of analytics directly into the hands of business users within every department of an organization -- sales, marketing, product development and human resources -- and into midsized enterprises. The technology combines software, storage and systems into a integrated appliance that can be up and running in a matter of hours and manage complex queries in just seconds.
The complementary nature of IBM and Netezza's existing relationship makes this acquisition a good fit for employees, clients and shareholders, IBM reports. Netezza's appliances are developed on IBM's systems technology and, combined with IBM software, power hundreds of clients applications around the globe.

While Netezza will open up new doors for IBM, IBM will put the full power of its global sales force and services expertise as well as its presence in 170 countries to help increase sales of Netezza's offerings around the world. This is one of the strengths of IBM's overall business and acquisition strategy. Netezza has been a strategic partner of IBM for many years with Netezza appliances built on IBM Systems.

Today, more than 350 clients across a variety of industries have adopted Netezza, including eHarmony, Neiman Marcus, Time Warner, Estee Lauder, Blue Cross Blue Shield of Massachusetts, United HealthGroup, Nationwide Insurance, Sapporo and others.

Over the past four years, IBM has invested more than $12 billion in 23 analytics related acquisitions. Today, more than 6,000 IBM industry consultants are dedicated to analytics, and in IBM's second-quarter of 2010, IBM's analytics business grew 14 percent.

IBM plans to integrate Netezza into its Software Group, which is expected to generate almost half of the company's profits by 2015.

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