Feeds

IBM ponies up $1.7bn for data warehouse maker

Your move, NEC or Dell

Secure remote control for conventional and virtual desktops

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Ellison: Sparc M7 is Oracle's most important silicon EVER
'Acceleration engines' key to performance, security, Larry says
Linux? Bah! Red Hat has its eye on the CLOUD – and it wants to own it
CEO says it will be 'undisputed leader' in enterprise cloud tech
Oracle SHELLSHOCKER - data titan lists unpatchables
Database kingpin lists 32 products that can't be patched (yet) as GNU fixes second vuln
Ello? ello? ello?: Facebook challenger in DDoS KNOCKOUT
Gets back up again after half an hour though
Hey, what's a STORAGE company doing working on Internet-of-Cars?
Boo - it's not a terabyte car, it's just predictive maintenance and that
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.