Details on the Deal
On March 14, 2005, IBM announced a definitive agreement to acquire Ascential Software, in deal valued at $1.1B and expected to close in the 2nd quarter of 2005. Once acquired, Ascential Software will report to Janet Perna, the GM for IBM’s Information Management solutions and is expected to be integrated into IBM’s WebSphere Information Integrator set of products. Ascential has partnered closely with IBM over the past few years on everything from joint engineering to joint sales to joint customer support. Originally an offshoot of the database company Informix, Ascential has leveraged its core ETL product as an engine for growth. Since 2001, the company has acquired numerous data integration-oriented technologies and companies, including Torrent Systems in 2001, for its parallel processing capabilities for managing large volumes of data, Vality for data quality capabilities, Mercator for transactional data transformation capabilities, and numerous other companies. Ascential and IBM share over 550 joint customers worldwide.
From IBM’s perspective, this acquisition completed IBM’s information integration offerings and rounds out their capabilities to cover both real-time, event-driven, access-in-place data movement and integration as well as high-speed, high-volume, parallel data movement, transformation, and data quality capabilities.
Key Success Factors
In order to make this acquisition a success, IBM will need to deliver on a few key success factors:
Maintain and strengthen its partner play, for both existing IBM partners and Ascential’s partners, as Upside Research believes that both will continue to play a key role in delivering information integration solutions to market.
Create a practical roadmap for Ascential’s products and how they will be rationalized against existing IBM information integration products. Build upon key integration points which already link IBM and Ascential products.
Outline how Ascential’s technologies and solutions will be integrated with the rest of IBM’s WebSphere software products, specifically in the areas of enterprise application integration and process integration, which are key focus areas for many organizations.
Help customers and prospects understand how to pick and choose which IBM/Ascential products to use when, and what the limitations are. Since Ascential has already acquired numerous companies over the years, IBM isn’t necessarily acquiring a complete product set that has a single, completely unified architecture, and thus it will need to move to help customers understand how the Ascential products it carries forward will mesh with both IBM’s products and the customer’s specific needs. Of course, Ascential has previously announced unified architecture initiatives (Hawk, Rhapsody) aimed at product unification with a common UI and integrated metadata repository, expected to be available in late 2005 and beyond. This unified architecture was one of the key factors for IBM in making the decision to acquire Ascential, and it will be important for IBM to re-affirm these initiatives and provide any additional details on changes that might occur in from leveraging parts of the IBM stack.
Upside Research believes this is a great acquisition for IBM, as well as for Ascential Software customers. For years, IBM has had a hole in its integration product offering in the high speed ETL area. With this acquisition, IBM has one of the broadest, if not the broadest, offerings in the data and information integration arena, with comprehensive capabilities for real time and historical information analysis. The acquisition compliments IBM’s existing WebSphere Information Integrator product line and we expect Ascential’s technologies to play a key role in future business integration offerings from IBM.
This acquisition is especially important for IBM because organizations are continuing to struggle with the integration challenges across their organizations. Even with existing data, application, and process integration technologies, organizations continue struggling to gain enterprise-wide views of the critical data, such as customer or product data. Solutions, such as Ascential Software’s Master Data Management solution which provide the capability to rationalize customer data across an enterprise through the use of repository, data transformation, and data access capabilities, are continuing to grow more critical as a result of this need for 360-degree views of customer or product data.
From the Upside Research perspective, Ascential Software compliment’s IBM existing offerings, specifically in the area of data placement, data transformation, and in delivering a robust infrastructure for meta data management. Its parallel engine and common meta data infrastructure provides a very scalable architecture for IBM and customers to use for high volume data movement, transformation and data quality management. In addition, some organizations have been struggling with the increasingly blurry line between different integration functions and software architectures, as EAI, ETL, and EII have all started adding complimentary capabilities to their core functionality and focus that blur the distinctions between competing products. As we’ve seen across the broader technology landscape, organizations are looking to consolidate their IT architectures, reduce the number of products and vendors, and work toward more integrated and strategic solutions. By acquiring Ascential, IBM positions itself well to address this increasing important market need and offer its customers a very scalable and comprehensive information integration architecture that spans from real time to high-volume mass data transformation and movement.
This acquisition will also put some competitors, such as Microsoft and Oracle, on the defensive in the area of information integration. In particular, Oracle has been developing robust data and information integration capabilities, as seen in their business integration products such as its Customer Data Hub and Product Data Hub, two solid products that enabled heterogeneous, enterprise-wide views and analysis of data.
Overall, Upside Research believes this is a strong acquisition for IBM, and although it will take some work for IBM to rationalize and integrate Ascential’s products with their broader integration and software product families, and that IBM, its customers, and Ascential’s customers will benefit from this purchase. By acquiring Ascential, IBM has the foundation for a universal information integration platform and one of the broadest integration offerings that the market has seen.
Details on the Deal