IBM buys data-integration vendor Cast Iron

IBM bolstered its data-integration portfolio Monday, announcing the acquisition of Cast Iron Systems, which focuses on connecting on-premise systems with cloud-based software.

Cast Iron's capabilities will help IBM customers build hybrid clouds that combine on-premise applications, public cloud platforms like Amazon Web Services, and private cloud deployments. Its technology is available as a physical or virtual appliance, or a cloud service.

Big Blue's software division has made more than 55 acquisitions since 2003, according to a statement. This one makes sense for a number of reasons, said Redmonk analyst Michael Coté.

Cast Iron has already built out integrations for many of the top SaaS products, such as Salesforce.com and Oracle CRM on Demand, Coté said. "For a company like IBM, if there's someone who's already solved that problem, it's an easier thing to buy [them] than do it on your own."

IBM's large enterprise customers are also "looking to them to be the trusted source for all this cloud hoopla," and the company stands to make ample services revenue in connection with developing hybrid clouds, he said.

In addition, the deal provides evidence that cloud computing is reaching a more mature stage among enterprises, which are already showing a willingness to use SaaS (software as a service) applications, he said: "When you get past the first rung, the next step is integrating with all sorts of on-premises processes."

IBM is buying a strong company in Cast Iron, and technology that could have broad appeal, said Rebecca Wettemann, vice president of research at Nucleus Research. "It's a great way for IBM to go back to Cognos customers, SPSS customers, even Oracle and SAP customers and say, 'we can be your one-stop-shop for integration in the cloud."

But it will be interesting to see how IBM handles Cast Iron's existing partnerships, which include deals with Oracle, Google and Microsoft, she added.

Cast Iron's existing customers shouldn't have too much to worry about, and could even benefit from greater product investment by IBM, she said.

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