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2/6/2011
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Bob Evans
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Global CIO: IBM's Most Disruptive Acquisition Of 2010 Is Netezza

The Top 10 reasons why Netezza's shaking things up inside and outside of IBM—including some tough talk for Larry Ellison and Exadata.

#10: Helps IBM push back on Oracle's aggressive Exadata claims. Asked how he'd contrast Netezza's technology and marketing approach with those of Oracle, Baum said, "First, Exadata's positioned solely as technology, not as a business solution, and second, Oracle wants it to be all things to all people. As Oracle tells it, Exadata's the answer for everything: it's the answer for OLTP, it's the answer for analytics, and for data warehousing, and on and on. The problem is, it's not a one-size-fits-all world out there. And if you try to build a one-size-fits-all solution like Oracle's done, all you're really going to do is create an extraordinarily complex environment because you expect the system to be able to do all sorts of things, instead of doing just one thing really, really well. And we all know that complexity drives up the cost, it leads to long time to value, and you spend all your time tuning it and getting all the pieces to work correctly."

#9: Tangibly underscores IBM's role in workload-optimized systems. While IBM has been taking the integrated hardware-software approach for some time, its marketing has lagged its technology in telling that story—and Netezza's unadulterated commitment to optimized systems and appliances should help IBM communicate its position more effectively. "I would argue that IBM's been on the workload-optimized path for a long time," Baum said, "and that's really core to how IBM's always thought about systems." True, but I still think that tradition and that sense of unvarnished commitment is much more widely known and believed inside IBM than outside—and I also think that one of the reasons IBM has elected to keep the Netezza name is to hammer home that commitment to the outside world.

#8: Powerful synergy from small customer overlap. "We're coming into IBM with a very strong market position," Baum said, "because we've been completely focused on one thing, and that has been defining the idea of an information appliance and specifically a data warehousing appliance. One of the things IBM saw very early on when we began talking with them about an acquisition was the strong customer base we have with global companies like NTT Docomo, MetroPCS, Nielsen, Acxiom, and many more. We also both learned that there's not a tremendous amount of overlap with IBM's customer base from a data warehousing perspective, and that creates a real opportunity for us to collectively expand on the customer relationships that IBM has and that Netezza has beyond our data warehousing and business analytics specialty and into other areas of information management."

#7: Creates substantial global growth opportunities for IBM. "As you know, IBM has been very focused on growth markets around the world, from the BRIC countries to other fast-growing geographies. And at Netezza, while we always believed we had something strong to offer in those markets, we just didn't have the scale to pursue all of those. So in a few cases in those growth markets, we had a foothold, but more often it would be more accurately called a toehold," Baum said with a laugh. "So part of the investment IBM's making in Netezza is in growth and scale on the international stage, and that's very exciting for the team here because while our story's been built around growth, it's just totally different now being inside IBM. . . . Our last three months were was a formal part of IBM and we're wrapping up our best year ever by far—we've exceeded plan by a substantial amount."

Next up are some thoughts on where the IT appliance business is headed:

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