IBM to Acquire Netezza

Expands business analytics capabilities through workload optimized systems.

IBM, a provider of IT infrastructure services, today announced that it has entered into a definitive agreement to acquire Netezza Corporation, a business analytics firm, 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. The company claims that Netezza will expand its business analytics initiatives to help clients gain faster insights into their business information, with increased performance at a lower cost. It adds that 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.

According to the company, the rate and pace of data is accelerating the IT opportunity around information and analytics. A recent global study conducted by it revealed that 83 percent of CIO's identified analytics as a top priority. The combined strengths of the company and Netezza are a key differentiator at a time when organizations of all sizes are looking to gain more insight from their business information. The existing relationship between it and Netezza reinforces the combined value to clients. Today, Netezza designs and develops its appliances on the company's systems technology and combined with its 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.

It articulates that 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. The simplicity of deploying Netezza appliances makes this technology ideal for the needs of high-performance analytics, requiring minimal administration and IT skills, and enables clients to run complex data queries within days of deploying the solution.

The company explains that with Netezza appliances, NYSE Euronext has drastically cut the time it takes to load and extract massive amounts of historical data so it can run analytic queries more securely and efficiently, while reducing runtimes from hours to seconds. Virgin Media, a UK provider of TV, broadband, phone and mobile services with millions of subscribers, uses Netezza across its product marketing, revenue assurance and credit services departments to proactively plan, forecast and respond to the effect of pricing and tariff changes enabling them to quickly respond with competitive offerings.

It further explains that both the company and Netezza see the importance of integration from the multiprocessor through middleware to business consulting to bring a higher level of efficiency through workload optimized systems. For example, Netezza appliance capabilities highlight integrated software with unique FPGA-Accelerated Streaming Technology (FAST) that allows the system to execute analytic queries at streaming speeds of up to milliseconds, significantly improving the performance and response times for critical business decisions.

The company mentions that the acquisition expands its information and analytics offerings, including services available through the company's Business Analytics and Optimization Consulting organization. Following the close of the acquisition, it intends to integrate Netezza within the company's Information Management software portfolio. Netezza has approximately 500 employees around the world.

"IBM is bringing analytics to the masses. We continue to evolve our capabilities for systems integration, bringing together optimized hardware and software, in response to increasing demand for technology that delivers true business value. Netezza is a perfect example of this approach," said Steve Mills, Senior Vice President and Group Executive, IBM Software and Systems. "Netezza strongly complements our business analytics capabilities and client base. Together, we have the opportunity to quickly leverage the technology and accelerate the offering."

"It's no longer just the CIO - every single department from finance to marketing professionals is tapping into the capabilities of analytics to draw meaningful insights. But clients cannot sacrifice time, cost or performance by deploying solutions that do not best meet each of their business needs," said Arvind Krishna, General Manager, Information Management, IBM. "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."

"Our vision of an appliance-based Intelligent Economy aligns very well with IBM's Smarter Planet strategy. Netezza appliances set the standard for performance and simplicity in data warehousing and analytics," said Jim Baum, President and CEO of Netezza. "Our customers choose our appliances for their fast time to value and how they simplify analytics against big data. Together with IBM, we are looking forward to extending our capabilities to a much broader market."