IBM Buys DataMirror for $162M

IBM has acquired replication specialist DataMirror for $162 million as the vendor adds flesh to the bones of its data warehousing and information on demand strategies. (See IBM to Acquire DataMirror.)

Under the terms of the all-cash deal, IBM will buy all of the Toronto-based firm's outstanding shares at a price of C$27.00 (US$25.8). DataMirror, which trades on the Toronto Stock Exchange, is the latest in a string of IBM acquisitions in the on-demand space, which include data migration specialist Softek, DWL, and FileNet. (See IBM Acquires Softek, IBM Acquires DWL, and IBM Nets FileNet for $1.6B.)

DataMirror's software identifies changes that have been made to structured data and then sends this data to back-end databases and applications. This could be, for example, a retailer sending information from point-of-sales systems directly to a data warehouse, enabling low stock to be quickly replenished.

The vendor's flagship offering is Transformation Server, which it claims can support a variety of data stores, including Oracle, IBM's DB2, Microsoft SQL Server, as well as Windows-, Unix-, and Linux-based systems. Users that have deployed Transformation Server include Imperial Tobacco, Office Depot, Kawasaki Motors Europe, and Tiffany & Co, which is using the software to send changes in its DB2-based sales data to a data warehouse, where the information is used for financial planning.

Other vendors playing in this space include GoldenGate Software and Lakeview Technology, which recently bought fellow replication specialist Vision Solutions. (See Lakeview OEMs From NSI.) Michael Curry, director of IBM's information integration program, confirms that the vendor looked at other firms prior to acquiring DataMirror, but would not name names. "DataMirror offered the broadest coverage in terms of the heterogeneous databases they support," he adds.At least one analyst thinks the acquisition is a shrewd move by IBM. "Although IBM already offers real-time data integration functionality in its WebSphere and DB2 product lines, the acquisition of DataMirror extends these capabilities, bringing additional support for heterogeneous environments," wrote Allan Krans, an analyst at Technology Business Research (TBR), in a research note today.

IBM is also getting its hands on DataMirror's 2,000-plus customer base as a result of the acquisition, which is expected to close in the third quarter of this year.

The Canadian firm's 220 employees are expected to move over to IBM when the deal closes, and its Toronto headquarters will also remain open, according to Curry. DataMirror CEO and founder Nigel Stokes and his management team will remain with the firm through the transition process, although Curry could not confirm whether they will stay longer term. "We're still going through the planning process," he says.

DataMirror is the 21st acquisition in support of IBM's Information on Demand initiative, which was launched in early 2006. The strategy essentially ties together a collection of different IBM products, such as DB2 databases and information management software, and offers them as a pre-packaged bundle to users.

IBM is now planning to use DataMirror's software to support its Information Server product, which is at the core of the Information on Demand strategy. In a nutshell, Information Server is a software solution containing tools for discovering and sharing data from a variety of sources.At this stage, Curry is unable to say exactly how DataMirror will fit into the Information Server platform. "It's certainly going to become part of the portfolio [but] that's another area where we have a lot of planning to do," he says. "We haven't released any detailed roadmaps."

In its most recent quarterly results, DataMirror reported first quarter revenues of $12.6 million, up from $10.3 million in the same period last year. For Fiscal 2008, the company expects revenues of between $55 million and $57 million, up from $46.5 million last year.

James Rogers, Senior Editor Byte and Switch