Experts Weigh in on IBM/Netezza Deal

The rate and pace of data is accelerating the IT opportunity around information and analytics. A recent global IBM study revealed that 83 percent of CIOs identified analytics as a top priority.To further capitalize on this growing trend, IBM entered into a definitive agreement this week to acquire Netezza, a leader in data warehouse, analytic and monitoring appliances, in a cash transaction at a net price of approximately $1.7 billion, after adjusting for cash.

 

Netezza is expected to expand IBM's 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, applicable regulatory clearances and other customary closing conditions, is expected to close in the fourth quarter of 2010.

 

CGT took to the web to find out what bloggers and industry analysts were saying about the deal. Here are just a few of the reactions that this big deal has elicited:

 

Mike Fightmaster, BloggingStocks: "Was it a smart move for IBM to dish out an 85% premium on Netezza's three-month trading average ($227 per share for a three-month trading average of $14.54)? Time will tell, as it will take a while for IBM to integrate the purchased company and its technologies. Once the integration takes place, we should see IBM begin to grow its product and sign on new clients. If that is the case, we could see the tech titan try to put some distance between itself and the $130 level. The equity has battled with this level throughout 2010 and this acquisition could be just the ticket for IBM to break through the resistance."

 

James Kobielus, Forrester: "IBMs acquisition of Netezza was a must for both vendors if they wish to grow their shares of the data warehousing (DW) market. They have a common archrival, Oracle, that is fielding an increasingly formidable appliance-based product portfolio, threatening both vendors' long-term positions in this dynamic market... We expect IBM to rapidly position Netezza's offerings, under its IBM Smart Analytics System (ISA)S big top, as its principal data-mart accelerators for both large enterprises and the midmarket. It should be noted that Netezza has strong advanced analytics and in-database statistical analysis capabilities in the TwinFin product platform. We expect IBM to waste no time leveraging and aligning those and other Netezza offerings with its best-of-breed SPSS and Cognos analytics portfolios."

 

Today, Netezza designs and develops its appliances on IBM systems technology and combined with IBM software powers many applications within organizations. The two companies 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. More than 350 clients across a variety of industries have adopted Netezza. Among its most well-known consumer goods clients are Estee Lauder and Sapporo.

 

In the last four years, IBM has invested more than $12 billion in 23 analytics related acquisitions. In IBM's second-quarter of 2010, IBM's analytics business grew 14 percent.Following the close of the acquisition, IBM intends to integrate Netezza within IBM's Information Management software portfolio.