Big Blue announced Monday it is moving deeper into data integration by acquiring Ascential Software Corp. for US$1.1 billion in cash.
IBM and Ascential have been partners for the past four years, jointly researching, marketing, selling and supporting Ascential products to common customers, said Janet Perna, general manager of IBM’s information management software division.
Currently, IBM also partners with Informatica, an Ascential competitor, and intends to continue the alliance.
IBM says Ascential will be integrated into its information integration business — an area which has grown quickly in the past year. Perna said in 2004 IBM’s information management software division experienced triple-digit growth, while Ascential’s revenue rose 46 per cent.
“IBM’s information management strategy is to build an information infrastructure for companies,” she said. “This [includes] relational databases and content management repositories. But an important part of the infrastructure addresses the challenge customers face around integrating information.”
Perna said 40 per cent of today’s IT budgets are spent integrating data and applications and IBM’s goal is to reduce its customers’ costs and time spent on integration work.
Once the deal is finalized, IBM will integrate its WebSphere Information Integrator product portfolio with Ascential’s software. Ascential lets users gather, move and enhance the quality of large amounts of data, while WebSphere Information Integrator allows users to centrally access and manage information stored in disparate locations.
The integration market is changing, said Peter Fiore, president of Ascential. “We hear from customers everyday about their preference to work with vendors able to provide a broad product platform with a…breadth of solutions that allow them to deploy technology across the enterprise.”
Perna said IBM has no plans to lay off any of Ascential’s employees or relocate them from the firm’s headquarters in Westboro, Mass.
Oracle Corp., SAP AG, and Microsoft Corp. are IBM’s biggest competitors in the information integration space, said Warren Shiau, an independent software analyst based in Toronto. “It’s shaping out to be a real battleground because this is where a lot of vendors think their services and consulting revenue will come from, and is coming from right now,” he said.
Shiau does not believe the acquisition will intensify competition between IBM and Oracle in the database market. He said Oracle database customers would likely choose Oracle for information integration, while DB2 users would select IBM.
Right now Oracle’s applications, including those acquired from PeopleSoft Inc. — and consequently, J.D. Edwards — support DB2. However, Oracle hasn’t decided whether Project Fusion — its initiative to integrate Oracle, PeopleSoft and J.D.E. platforms — will support DB2. If Oracle decides not to then DB2 customers who use these applications could be left in the lurch, with no upgrade path.
SAP, the dominant player in the enterprise applications space, competes with IBM on a completely different level, Shiau said. “SAP would make the argument that you ought to integrate to the application instead of the database.”
And all three firms – Oracle, SAP and IBM – also have to contend with Microsoft, an up-and-comer in this fiercely competitive space.
Microsoft has a huge initiative in the pipeline dubbed Project Green, which would integrate all its business applications, including Solomon, Navision, Great Plains and Axapta with Microsoft CRM, Shiau said.
He said Microsoft also plans to integrate Project Green with its operating systems and office suite. When this happens, Shiau said, organizations will ask themselves why they need to bother with a large data integration project, if they can simply standardize on Microsoft.
Reports from Microsoft’s Convergence event last week in San Diego indicate Project Green will continue into 2008
— With files from IDG News Services