Among the numerous acquisitions IBM made last year, the one that's having the biggest impact both inside IBM and outside in the industry is shaking up the ways in which customers regard their data, how they try to extract higher levels of business value from those data, and how they're beginning to exploit those data relentlessly to peer into the future and pounce on revenue opportunities.
Six months ago, IBM announced its intention to acquire Netezza for $1.7 billion, and that disclosure came right in the middle of Oracle Open World—perhaps a coincidence, and perhaps not. Two months later the deal was closed, and since then Netezza's high-growth revenue trajectory has only accelerated within IBM's expansive information-management and analytics family.
After chatting with IBM Netezza CEO Jim Baum last week, I've pulled out from Baum's comments a range of timely ideas that help bring some perspective to the rapidly evolving and often-intersecting areas of data warehousing, purpose-built appliances, business analytics, Big Data, and how companies are trying to leverage all of that to turn insight into foresight. I'll share those in just a moment but first let me offer some quick context on Netezza.
Baum offers a compelling point of view on those developments: in mid-2010, analysts were forecasting that standalone Netezza would finish the calendar year with revenue of about $250 million or $260 million. But just a few months later, Netezza had become part of an iconic $100 billion global corporation that has for the past few years been banging the drum loudly for the entire industry about the power of data and analytics and their role in IBM's mega-theme of Smarter Planet.
IBM Netezza's top priority, said Baum, is "to preserve the elements that fundamentally differentiate Netezza in the marketplace for our customers: our price-performance, our total cost of ownership, and being very easy to do business with. We want to preserve and enhance all those traditional attributes, and there's a lot of activity going on within IBM to help us achieve and expand upon all that."
And there's also a parallel effort to crank up every facet of Netezza's operations to be able to fully exploit the huge opportunity both companies see as customers place greater value on their data and on their ability to extract from it powerful looks into the future.
"As we were coming into IBM, Netezza's at about 500 employees—but by the end of the year, we want to have that over 850, including doubling the size of our field organization with the folks to are selling and supporting the products," Baum said, chuckling a bit at the scaling power that IBM can deliver but that would have been unfathomable for Netezza as a standalone company.
Additional investments are being made in expanding the company's analytics reseller channel and in strengthening ties with ISVs for industry-specific solutions. "That's not just software companies within IBM but also very significant partners like SAP's Business Objects, Informatica, MicroStrategy, and other key ecosystem partners," Baum said.
Against that backdrop, here's my analysis of the Top 10 reasons why Netezza is IBM's most disruptive acquisition from 2010—and I'll roll them out in ascending order, starting with #10 and moving up to #1: