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. ®

Beginner's guide to SSL certificates

More from The Register

next story
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
The DRUGSTORES DON'T WORK, CVS makes IT WORSE ... for Apple Pay
Goog Wallet apparently also spurned in NFC lockdown
IBM, backing away from hardware? NEVER!
Don't be so sure, so-surers
Hey - who wants 4.8 TERABYTES almost AS FAST AS MEMORY?
China's Memblaze says they've got it in PCIe. Yow
Microsoft brings the CLOUD that GOES ON FOREVER
Sky's the limit with unrestricted space in the cloud
This time it's SO REAL: Overcoming the open-source orgasm myth with TODO
If the web giants need it to work, hey, maybe it'll work
'ANYTHING BUT STABLE' Netflix suffers BIG Europe-wide outage
Friday night LIVE? Nope. The only thing streaming are tears down my face
Google roolz! Nest buys Revolv, KILLS new sales of home hub
Take my temperature, I'm feeling a little bit dizzy
Storage array giants can use Azure to evacuate their back ends
Site Recovery can help to move snapshots around
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The Heartbleed Bug: how to protect your business with Symantec
What happens when the next Heartbleed (or worse) comes along, and what can you do to weather another chapter in an all-too-familiar string of debilitating attacks?