Big Data Means Big Sales: IBM to Buy Netezza for $1.7B

The era of Big Data arrived in full earnest this week when IBM decided to acquire Marlborough, Mass.,-based Netezza Corporation, a maker of data warehousing analytics for a whopping $1.7 billion in cash. IBM’s decision came hours after Oracle announced a cloud-based Exadata Elastic Service at Oracle World in San Francisco.

IBM is offering $27 a share for the Neteeza and hopes that the smaller company would help with its growing business analytics. Over the past four years, IBM has invested more than $12 billion in 23 analytics related acquisitions.

Netezza has been selling an appliance focused on data warehousing analytics and is finding a lot of traction with its products, mostly because most corporations are trying to find ways to make better sense of all the data locked in their data stores. EMC recently bought GreenPlum for similar reasons as well. And with sensor-based networks and data those networks produce making their way into data warehouses soon, it makes perfect sense for IBM to make a bold move.

Making sense of the data is viewed as a big opportunity, something Netezza understood very well. In this second quarter of 2010, Netezza saw its sales jump 45 percent year-over-year. Netezza has more than 350 clients across a variety of industries have adopted Netezza, including eHarmony.

With IBM’s backing, Netezza becomes a much more fearsome competitor. From my perspective, this is actually a great move by IBM and this will put additional pressure on two companies – Teradata and Oracle.