Feeds

IBM ponies up $1.7bn for data warehouse maker

Your move, NEC or Dell

Top three mobile application threats

If Japanese server maker NEC wanted to build a dataware housing business based on Netezza's database and field programmable gate array accelerators, then it is going to shell out a couple billion dollars. Because server rival IBM just bought Netezza for $1.7bn, fleshing out its data warehousing and analytics portfolio as it gears up to do battle with Teradata, Oracle and Microsoft.

As El Reg has previously reported, Netezza has seen explosive growth in its recent quarters. Revenues were up 45 per cent in the second quarter ended July 31, to $63.8m, with $3.2m in profits. The company would be instantly more profitable as part of Big Blue since Netezza pays IBM for the BladeCenter blades servers that are the hardware in which the software and FPGAs that make up the TwinFin appliances run.

Two weeks ago, there was speculation that Netezza was an acquisition target, and on 8 September, when the rumors hit, Netezza's stock rose by 12.6 per cent to just a little over $24 apiece, giving Netezza a market capitalization of $1.32bn. Both Dell and IBM were mentioned by wagging tongues as potential suitors for Netezza. IBM because it likes hardware acceleration and Dell because it does not have a data warehousing business to speak of and it needs to get into software.

IBM is offering $27 a share for Netezza, which works out to $1.7bn net after taking out the $66.6m in cash the publicly traded company has in the bank. Considering the revenues and profits Netezza has, most people looking at Netezza would think that even the $1.32bn valuation on the company was excessive, but given the justifications that Wall Street makes for public companies, we pegged the asking price at between $1.6bn to $1.7bn. And if Dell or NEC decides to make a counterbid, it could go higher.

Netezza has 350 customers and will be tucked up into IBM's newly created Systems and Software Group, managed by senior vice president Steve Mills. IBM will be talking about the acquisition later today and expects it to close in the fourth quarter.

One of the things that Steve Baum, Netezza's president and CEO, has said Netezza needed - and one of the reasons why Netezza partnered with NEC - was that it needed to take a channel approach to augment its direct sales model.

IBM has over 6,000 consultants dedicated to data analytics, which dwarfs Netezza's 470-strong employee base. Clearly, IBM thinks it can rapidly ramp up Netezza's sales. ®

High performance access to file storage

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Inside the Hekaton: SQL Server 2014's database engine deconstructed
Nadella's database sqares the circle of cheap memory vs speed
BOFH: Oh DO tell us what you think. *CLICK*
$%%&amp Oh dear, we've been cut *CLICK* Well hello *CLICK* You're breaking up...
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Amazon reveals its Google-killing 'R3' server instances
A mega-memory instance that never forgets
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.