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IBM's Ascential Buy Focuses on Data Integration

IBM's announcement on Monday that it plans to buy Ascential Software Corp. for $1.1 billion in cash emphasizes the rapidly growing importance of the enterprise data integration market. Along with consulting services, Ascential offers products for enterprise meta-data management and integration, useful for building data warehouses and complex business intelligence systems.

The company was once part of Informix, a database software systems business that IBM acquired in 2001. Ascential has been generating healthy growth, with revenue growth up 46 percent year over year in 2004, to $271.9 million. IBM currently resells Ascential's products and accounted for more than 10 percent of the company's revenue in 2002.

Other companies are clearly pursuing the same market-Microsoft last week announced plans to purchase Groove Networks Inc., with its information-sharing and collaborative capabilities.

According to Sageza Group analyst Rob Kidd, the acquisition enhances IBM's existing architecture by adding a strong compliment to IBM's WebSphere Information Integrator. Ascential's products can move data across a heterogeneous environment by transforming different structures with sets of rules, then loading them into another database.

In the bigger picture, Kidd says, the acquisition pushes the industry farther toward the Holy Grail of truly unified data, not just data integration across heterogeneous environments. "What people really want is not integrated data, but unified data," Kidd says. "The industry will move to that in bits and pieces. It's what an IT executive would like to see, [although] we'll never completely get there."

Ascential products include an ETL solution called DataStage EX, as well as INTEGRITY, a data quality management application, and MetaRecon, for data analysis and profiling. Customers include Anheuser-Busch, GlaxoSmithKline, The Gap and Hewlett-Packard. Ascential also offers consulting, training and support.

The deal, which is subject to the approval of Ascential shareholders, as well as regulatory approval, is expected to close in the second quarter of this year.

About the Author

Linda Briggs is a freelance writer based in San Diego, Calif. She can be reached at lbriggs@lindabriggs.com.

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