In its second-largest acquisition, Amazon buys the company for $970 million.
IBM seeks to shore up its analytics technology with Netezza’s data warehouse.
To respond to a growing demand among online retailers and other businesses to gather, store, analyze and use analytics data on customer activity, IBM Corp. has been on an acquisition tear, buying such providers of web analytics and business intelligence technology as Coremetrics, SPSS and Cognos. To offer another way for clients to hold that data for use with analytics programs, it plans to acquire Netezza Corp., a provider of data warehouse technology, for approximately $1.7 billion in cash. The deal, subject to shareholder approval and regulatory review, is expected to close in the fourth quarter.
Bernie Spang, IBM’s director of strategy for information management software, says IBM plans to offer Netezza’s data warehouse technology as part of IBM’s InfoSphere data warehouse software group and pre-integrate it with IBM’s suite of analytics software. As a software appliance, the Netezza data warehouse comes already configured to handle analytical projects such as predicting the revenue and cost of marketing campaigns, Spang says.
For example, a retailer could pull data from Coremetrics on how customers have browsed its e-commerce site and apply data from the predictive analytics technology of SPSS to project expected sales from a planned online merchandising or marketing campaign. “Netezza is ideal for specific, high-performance analysis to support planned investment in marketing campaigns,” Spang says.
Greg Girard, an analyst and program director of merchandising strategies at research and advisory firm IDC Retail Insights, says IBM’s moves to build up its analytics technology suite supports a growing demand for tools that help retailers manage multichannel customer data to support more effective merchandising and marketing programs.
“IBM's demonstrable business intelligence and analytics strategy is readily discernable in the context of the fundamental transformations we see underway in retail—omnichannel retailing, growth via same-shopper marketing and sales strategies, and the social and mobile e-commerce being foremost among them,” Girard says in a blog posting scheduled for Sept. 24.
Girard also notes that, although Netezza serves clients in multiple industries, it’s biggest market appears to be retailers. “While Netezza plays across many vertical industries and doesn't disclose revenue by industry, it's our sense that retail is very likely the top vertical by revenue,” he says.
Netezza clients include includes Neiman Marcus, Estee Lauder, Burlington Coat Factory and The Carphone Warehouse.