IBM has now invested more than $14 billion over the past four years to bolster its footprint in the data analytics market. Netezza's operations will be folded into the company's Information Management unit.
IBM executives have said the addition of Netezza would broaden their company's portfolio of offerings around database and business intelligence platforms.
"Netezza strongly complements our business analytics capabilities and client base. Together we have the opportunity to quickly leverage the technology and accelerate the offering," said senior VP Steve Mills, in a statement at the time the agreement was disclosed.
Netezza went public in 2007, and quickly made a name for itself by developing data warehouse appliances that combine hardware, software, and business intelligence tools in a single box. Its list of high-profile customers includes AOL Advertising, Blue Cross Blue Shield of Massachusetts, British Sky Broadcasting Group, and the Marriott hotel group.
The company counted about 500 employees at the time of its acquisition by IBM. IBM did not say whether there would be any job cuts associated with the transaction.
IBM believes Netezza's one-stop shop approach to analytics and data warehousing makes its offerings appealing not just to large enterprises, but also to departments, branch offices, and smaller businesses.
"It's no longer just the CIO, every single department from finance to marketing professionals is tapping into the capabilities of analytics to draw meaningful insights," said Arvind Krishna, IBM's general manager for Information Management.
"The addition of Netezza will reinforce IBM's focus in understanding client's needs by providing them a broader set of analytics capabilities and bringing the power of analytics right into the hands of business users at every level within an organization," said Krishna.
IBM pegs the overall market opportunity in business analytics at $100 billion and said its cut should reach about $16 billion by 2015.
Observers say the addition of Netezza would put IBM on a more competitive footing with other data warehouse players, like Oracle and Teradata. "With IBM acquiring NZ, it will be able to combine IBM's XIV storage, as well as its blade and networking hardware for a fully integrated appliance offering," said Wells Fargo analyst Jason Maynard, in a recent research note.
Netezza's simplified approach to data analytics has resulted in rapid growth over its short life. In August, the company reported a 45% year-over-year increase in second quarter revenue, to $63.8 million, while net income ballooned from $700,000 to $3.3 million over the period.