IBM Reflects on DataMirror Acquisition
IBM disclosed on Monday plans to acquire one of its partners, real-time data integration and data protection specialist DataMirror, for about US$161 million (about C$170 million) in cash.
The acquisition bolsters the Armonk, N.Y.-based behemoth's "Information on Demand" business initiative, a phrase used by Big Blue to denote its approach for helping companies leverage information more effectively. The announcement comes roughly two months after DataMirror unveiled its results for Q1 of fiscal 2008, including C$12.61 million in overall revenue, a year-over-year increase of 22 percent. License revenue for the quarter came in at C$5.65 million, a 60 percent year-over-year uptick.
The transaction, subject to closing conditions such as shareholder and regulatory approvals, is expected to close in the autumn. Once the deal has closed IBM plans to use DataMirror software to support IBM Information Server, its information integration platform; and integrate DataMirror with IBM's Information Management Software unit, led by Ambuj Goyal, the unit's general manager.
At its core, DataMirror's functionality is designed to allow organizations to manage and monitor data in real-time, essentially helping them to make better business decisions. For example, DataMirror boasts of retail companies using its offerings to align store-based systems with e-commerce tools in real-time, while manufacturing firms can share inventory and product information with partners over the Internet.
DataMirror's product portfolio includes Transformation Server, a software-based offering for selecting, transforming, and replicating data from multiple databases into an operational data store, mart, or warehouse; iReflect, which distributes and consolidates data in real-time between Oracle databases; LiveAudit, which provides an audit trail of data changes; and iCluster, a business-continuity application. DataMirror has more than 2,200 customers including FedEx Ground and Tiffany & Co.
"Organizations need the ability to capture and use information in real-time to help them make better business decisions, better serve their customers, and increase operational efficiencies," Goyal said in a statement. "The combination of DataMirror technology and IBM information management software will help customers bring real-time data analysis closer to actual business processes, allowing them to be more competitive and to generate more value from their information."
Ontario, Canada-based DataMirror has been an IBM Advanced Partner in IBM's PartnerWorld for Developers program; the acquisition by IBM follows a 10-year relationship during which the companies have jointly worked together to promote product integration, according to Allan Krans, CBQ & SBQ analyst at Technology Business Research. "Although DataMirror also maintains partnerships with IBM competitors such as HP, Microsoft, and Oracle, the company was heavily tied to the IBM platform," he said in a written statement.
"Based on DataMirror's most recent earnings release, 59 percent of license revenue utilized IBM's DB2 as the supporting database, compared with 13 percent for Microsoft's SQL Server and 24 percent for the Oracle database," Krans' statement continued. "In addition to a high attach on IBM database products, DataMirror's iCluster high-availability software is directly tied to IBM's System i server products." Krans added that the acquisition is consistent with many of IBM's recent purchases, in which partners are the first consideration for acquisition targets. "TBR believes that this strategy enables the company to minimize product integration issues [and] avoid major culture clashes, thereby increasing the probability of post-acquisition success of an acquired company," he wrote.
Ian Finley, a research director at AMR Research, notes that IBM's March 2005 acquisition of enterprise data-integration software vendor Ascential Software armed IBM with significant [extract-transform-load] capabilities. But, he says, "what it didn't give IBM was this real-time capability, and what DataMirror brings to the party is this additional type of technology that allows them to do more in terms of real-time analytics."
This acquisition, Finley adds, "is not just IBM taking a chance on a technology. This is more of a part of a long-term trend of customers looking for more and more up-to-the-minute information."
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