IBM To Continue Acquisition Spree

Exec says Big Blue's appetite for smaller middleware and analytics companies remains strong.

Paul McDougall

October 7, 2010

2 Min Read
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IBM's torrid acquisition pace will continue for the foreseeable future as the tech conglomerate looks to round out its existing portfolio of IT products and services while seeking new offerings that will position it for future growth markets.

IBM has announced or closed 12 deals so far this year, including four in just the past three weeks. "Rate and pace of that is not going to change," said IBM senior VP for Software Solutions Mike Rhodin, speaking Thursday at a tech industry conference in Barcelona, Spain, according to the Reuters news agency.

Since September 15, IBM has announced or closed buyouts of integrated risk management solutions vendor OpenPages, business analytics appliance maker Netezza, data center specialist Blade Network Technologies, and cloud-based marketing software developer Unica. In May, IBM agreed to acquire B2B e-commerce specialist Sterling Commerce from AT&T for $1.4 billion.

"The ones we have made this year are indicative of what to look for," said Rhodin, indicating IBM will continue to focus primarily on deals that center around key middleware and business analytics products.

Analytics is one of the tech industry's hottest markets as businesses look to make sense of terabytes worth of information streaming in from the Web, mobile devices, and smart sensors deployed in the field.

IBM isn't the only tech giant feasting on smaller niche players. Rivals Hewlett-Packard and Oracle have been equally busy on the M&A front, an indication the IT industry is seeing a new wave of consolidation. This year alone, HP has bought out Fortify Software, ArcSight, 3PAR, and Palm, spending about $5 billion in the process.

Oracle, for its part, has completed eight deals so far this calendar year, including the closing of Larry Ellison's signature, $7.4 billion buyout of enterprise server and software maker Sun Microsystems.

The rash of deals is propping up the stocks of numerous mid-tier IT companies, as investors ponder which of them will next be snapped up. Shares of networking vendor Brocade recently spiked 11% amid speculation it was in IBM's sites, but the stock has since cooled as the whispers receded.

IBM shares were up .07%, to $137.93, in early trading Thursday. Oracle was up .44%, to $27.70, while Hewlett-Packard shares were off .27%, to $40.63.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

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