Breaking News — IBM to Acquire Netezza

IBM today announced its intention to acquire Netezza, a publicly held company based in Marlborough, Mass., in a cash transaction at a price of $27 per share or at a net price of approximately $1.7 billion, after adjusting for cash. IBM said that the acquisition of Netezza, a provider of high-performance analytics in a data warehousing appliance, will expand its business analytics initiatives to help clients gain faster insights into their business information, with increased performance at a lower cost.   The acquisition, which is subject to Netezza shareholder approval, regulatory clearances and other customary closing conditions, is expected to close in the fourth quarter of 2010.    

Business analytics is one of the fastest growing segments in the IT industry, observed Arvind Krishna,  general manager of IBM's Software Group's Information Management business, during an IBM  press teleconference to discuss the significance of the planned acquisition. Noting that it is a key growth driver for IBM, Krishna stated that it is projected to increase from $9.4 billion for IBM in 2009 to $16 billion by 2015. The recent pace of data which being gathered in ever increasing quantity by IBM's clients accelerates the opportunity around information and analytics and is a top priority for organizations around the globe, he added.

Speaking after Krishna, Jim Baum, president and CEO of Netezza, said, "Our product has been significantly differentiated from other approaches and other similar products in the market based really on two key elements, one is the element of price/performance and the ability to bring these capabilities to market at a lower total cost of ownership, and the other is one of simplicity. These systems that typically underlie advanced analytics solutions can tend to be very complex when implemented using more traditional methods and so we have taken the complexity out of that by inextricably integrating computing capability and networking and storage and database software  to build a purpose-built appliance that is used specifically to solve the problems associated with business analytics."

By bringing this simplicity, ease of deployment, and speed of Netezza to IBM, the aquisition will help IBM accelerate its initiatives "to bring analytics to the masses," Baum continued. "It is a common objective of both IBM's and Netezza's and something we have both been very focused on. And so bringing this technology into the portfolio of IBM technologies will allow this to accelerate that initiative."

From the Netezza perspective, he said, the acquisition when it is completed, "gives us tremendous global reach. When this deal closes, we will have the opportunity to stand on a platform that gives us access to markets and to customers that were previously inaccessible to us, and likewise from a technology perspective, we will also have access to technologies that will greatly enhance the Netezza and IBM combined offerings."

Netezza and IBM have been strategic partners for many years focused on workload optimized systems that deliver integrated systems, software and storage for analyzing vast amounts of complex data.  Today, more than 350 clients across a variety of industries have adopted Netezza.  These companies include eHarmony, Neiman Marcus, Time Warner, Estee Lauder, Blue Cross Blue Shield of Massachusetts, United HealthGroup, Nationwide Insurance, Sapporo, NYSE Euronext, Virgin Media and others.

Following the close of the acquisition, IBM intends to integrate Netezza within IBM's Information Management software portfolio.  Netezza has approximately 500 employees around the world. For Information on Demand and IBM Information Management, go here.  For more information about Netezza, go here.