In-Depth

Big Blue Leapfrogs to Head of Data Integration Pack

The Ascential acquisition lets IBM address all of its relational database and information integration shortcomings in one fell swoop.

• By Stephen Swoyer
• 03/22/2005

Call it a case of the chickens coming home to roost—four years later. When IBM Corp. purchased one-time relational and object database high-flyer Informix in 2001, the latter company’s ETL business was spun off as a separate entity—data integration specialist Ascential Software Corp.

Last week, IBM finished the deal, snapping up Ascential for $1.1 billion in cash.

The deal was a foregone conclusion in a couple of respects, analysts say. Unlike competitors Microsoft Corp. and Oracle Corp., for example, IBM’s DB2 database was bereft of anything more than a basic (vanilla SQL) extraction, transformation, and loading (ETL) component. Then there’s the fact that IBM’s information integration stack—which comprises enterprise information integration (EII), content management, and mainframe data access components—was complete in all respects but two: ETL and metadata management.

Ascential gives Big Blue all of this—in spades. The company also offers data quality and data profiling technologies, along with a real-time data integration piece. From a Big-Iron perspective, Ascential also markets an ETL tool that runs natively on zSeries.

The upshot, then, is that by acquiring Ascential, Big Blue simultaneously addressed all its relational database and information integration shortcomings in one fell swoop.

Jeff Jones, director of strategy for Big Blue’s data management portfolio, downplays the idea that IBM’s Ascential acquisition is a DB2-centric play. For starters, he says, DB2 already ships with a barebones ETL component. “It’s SQL-based. It’s basic. It’s not going to challenge Ascential. It isn’t going to challenge too many people. But we recognized that to really capture hearts and minds, we needed to go further,” he indicates. “Ascential gives us the ability to instantly upgrade to high speed, high volume, data cleansing, data profiling—far beyond what SQL is capable of doing.”

In almost all respects, analysts say, the deal was a no-brainer.

“As Ascential and IBM have been strong partners since Ascential’s creation … the acquisition, while somewhat of a surprise, makes a great deal of sense,” says Mike Schiff, a veteran industry watcher and senior analyst with consultancy Current Analysis. “It certainly will enhance and allow IBM to control data-integration technology it now resells while providing Ascential’s installed base with very deep pockets to support and evolve Ascential’s technology.”

What’s more, Schiff notes, the two companies have a long history of collaboration, going back to the acquisition of the erstwhile Informix: Ascential is an IBM Strategic Alliance and Premier business partner, and Big Blue—for its part—is Ascential’s largest reseller partner. “IBM has a history of establishing partnerships with vendors. and then acquiring those that provide the most benefit. … It certainly has had a chance to try Ascential and work with its people before acquiring it,” he writes.

But is Ascential worth $1.1 billion? Schiff sees several upsides to the acquisition. “IBM gains market position, a strong set of data-quality and data-integration products, and a brand and set of products and services that will not only generate attention but will also bring customers to its fold, especially those that are concerned about the size or future stability of their vendors,” he notes.

For existing Ascential customers, Big Blue stresses that very little will change: For example, Ascential CEO Peter Gyenes will stay on and report directly to Nelson Mattos, who is second in command to Janet Perna in IBM’s Information Management division. Big Blue has also indicated that it plans to retain the majority of Ascential’s employees.

The deal isn’t entirely without risk for IBM, of course. For starters, Ascential also has partnerships with Electronic Data Systems Inc. (EDS) and Accenture, two large services providers that compete globally with Big Blue. It’s unlikely that either company will enthusiastically recommend ETL or data integration technology that boosts a competitor’s bottom line. The same could be said about several of Ascential’s other partners, including SAP AG and the former PeopleSoft. Reseller arrangements with these vendors and others comprise a not-insignificant chunk of Ascential’s very robust revenues.

What’s more, some vendors in the ETL space have already started disseminating fear, uncertainty, and doubt (FUD) about the post-acquisition Ascential technology stack, which, they argue, will be tightly coupled with DB2, WebSphere, and IBM’s WebSphere-centric integration offerings—to the exclusion of other RDBMSes and data sources.

Not surprisingly, IBM’s Jones rejects this messaging.

“It’s an easy and invalid conclusion to make. That’s what [other ETL vendors] would like to see happen. If you ask IBM’s Systems and Technology Group how many IBM servers get sold with Oracle databases on them, you’d get a number that would surprise you. And Oracle is our friend from that vantage point. That’s not my vantage point; it’s a company vantage point,” he notes.

Jones says Ascential’s data integration technology is already integrated at a very low level in several of IBM’s offerings, including its WebSphere Business Integration (WBI) stack. “Ascential had already been helping us pretty deeply there as a partner and OEM of our technology,” he says. “We also have their stuff involved in our Risk and Compliance solution, which is a broader solution area than middleware, and we have their stuff included.”

Jones says Ascential’s data integration offerings tally nicely with IBM’s own information integration-centric technology portfolio. In most cases, he explains, customers will be looking at heterogeneous data integration scenarios, which is where Big Blue’s existing technology stack—which comprises not just data integration but also event publishing and enterprise search—comes into play, along with Ascential’s metadata management, data-quality, and data-profiling components. In other customer scenarios, particularly with mainframe data, Ascential’s ETL technology figure most prominently, Jones says.

“I think for the ETL kinds of applications it makes sense to use straight Ascential, so we’ll be rationalizing it as we go along. Maybe it’s not sufficient for all applications to get data from wherever it might be and pull it in. Maybe it’s too slow. Maybe for certain application you need to have a copy of it locally that’s automatically maintained, that involves some transformation,” he concludes.