In-Depth

IBM Snags AlphaBlox

Acquisition seen as consistent with Big Blue’s middleware-centric BI strategy

• By Stephen Swoyer
• 07/21/2004

IBM Corp.’s burgeoning business intelligence arsenal got a shot in the arm last week when Big Blue announced a definitive agreement to acquire analytic applications vendor AlphaBlox Corp.

The AlphaBlox technologies provide “building blocks” for constructing analytic applications or embedding analytics in existing applications, IBM officials say. “It’s very much a developer-oriented technology. People who are building applications can very much embed BI and analytics into [their applications],” confirms Dr. Anant Jhingran, distinguished engineer and director of business intelligence with IBM Software Group.

In this respect, says Jhingran, AlphaBlox’ component technology and J2EE underpinnings are an excellent fit: “Not only did they have the right component technology, but it was also very much IBM-architecture compliant.”

Not surprisingly, this dovetails nicely with IBM’s overall BI strategy, which is to market a set of BI technologies under the umbrella of its “middleware” offerings, such as WebSphere Application Server and even DB2 Universal Database.

“IBM’s strategy is fairly simple. IBM doesn’t want to develop applications, because then they put themselves in competition with other parties. What they want to do is provide a platform that their partners can use to develop applications,” explains Mike Schiff, a senior analyst with consultancy Current Analysis. This helps to account for IBM’s sometime question-begging positioning of its DB2 database as middleware, Schiff says: “Middleware to IBM includes the database, and the strategy is to make the middleware the development platform of choice and attract lots of third-party applications. The idea is that you don’t have to look over your shoulder and question if IBM is going to release something that competes with you.”

Jhingran, for his part, says that the AlphaBlox technologies will be broadly disseminated across IBM’s middleware offerings. For example, he explains, Big Blue plans to incorporate some of the AlphaBlox analytics functionality into one of its WebSphere Business Integration products. “We’re also taking and bringing it out as complementary, as part of other products, like [WebSphere] Business Integrator Monitor. That is shipping right now, but it will get enriched [with components from AlphaBlox].”

In this case, Jhingran says, customers will be able to tap the AlphaBlox analytics to help assess the efficacy of their integration efforts.

AlphaBlox, founded in 1996, claims at least 100 marquee customers, not all of which, understandably, are DB2 shops. What, then, does IBM have in store for them?

“We are going to completely support our existing customers, whether they’re based on Microsoft Analysis Services or Hyperion or DB2,” Jhingran says. “All of our customers get the full power of IBM behind them,” he continues, noting that, “In a lot of places, they support our middleware on top of what might be perceived as competing databases, at the same time.”

In this respect, Jhingran says, IBM plans to release several additional iterations of the AlphaBlox technology, which will be available to support existing customers. “We plan for as far as we can see at least a couple of more releases, that’s not to say that there won’t be more, but we plan for at least two more.”

Big Blue plans to tinker with AlphaBlox’ existing product plans to some extent, concedes Jhingran. “They had a good roadmap. Obviously the demands of the [development] team are now slightly different. We may slot in a few things earlier and a few things later. But we do plan enhancements [to the AlphaBlox technology]—things like much more platforms we will support, more languages we will support.”

Current Analysis’ Schiff says that he was surprised by the timing of the announcement, in large part because AlphaBlox had announced a new executive team earlier this year. “AlphaBlox had recently staffed up its management team, had basically pulled together a first-class management team, and appeared to me ready to undue the sins of the past, when it’s technology perhaps outlived the capabilities of its executives,” he indicates.

IBM will absorb AlphaBlox’ development team, along with its sales and marketing personnel, says Jhingran.