IBM's US$1 billion acquisition of Informix Software last week is being viewed by analysts as an effort by Big Blue to expand its presence in the Unix database market and compete more effectively against rival Oracle.
The deal ends eight months of speculation about the fate of the troubled software vendor. However, it remains to be seen how quickly and effectively IBM can capitalize on its acquisition of 120,000 Informix customers and how well it can retain them. Analysts are split on the potential outcomes.
"This has very little to do with Informix and really has more to do with IBM essentially buying market share," said Betsy Burton, an analyst at Gartner Group.
Although IBM and Oracle each own about 30 percent of the overall database market, Burton said she sees the deal as more of a reaction to Oracle's 60 percent ownership of the Unix market, where Informix actually outpaced IBM last year with 16 percent of the market compared with 10 percent for Big Blue. However, Informix owns just 5 percent of the overall database market.
"It's really a shot in their arm, in terms of their credibility in the Unix [database] space," said Burton. However, if IBM doesn't create a clear strategy for handling Informix's seven product lines, "it could derail or defocus the company," she said. "It's a big bet for IBM."
DB2 Market Push
Even though Informix had been working on its next-generation database product, called Arrowhead, DB2 already meets the design objectives toward which Arrowhead was working and will be promoted for all future sales initiatives, said Janet Perna, general manager of IBM's data management unit. IBM will continue to support and enhance Informix's existing customer base, she said, but will lead with DB2 for all new projects and customer acquisitions.
Seth Grimes, founder of Alta Plana, a database consulting firm, said that might not be so simple.
"It will take years for IBM to merge Informix software into its product, and I think that it will be difficult for them to make a compelling case on technical or financial grounds for Informix users to migrate to DB2," he said.
At least one Informix customer is upbeat about the deal. George Anderson, a database administrator at Grove Worldwide LLC, an industrial equipment manufacturer, said he believes IBM will be able to do with Informix what Informix itself couldn't do - "take a superior database product" and beat Oracle.
"Informix never had the infrastructure to fully realise the potential of their product in the marketplace," said Anderson. "I just hope that IBM isn't buying Informix so that they can eliminate it as competition for their very inferior DB2 Unix product."
The database sell-off comes as Informix is emerging from a massive corporate restructuring. Last August, the company split into two independent operating companies: Informix Software, which focuses exclusively on databases, and Ascential Software, which took over responsibility for the company's information management applications. Ascential will become an independent company as a result of the IBM buyout.
Jim Foy, president of Informix Software, said that the restructuring succeeded in re-establishing Informix's credibility and that the buyout is really the result of having found a company with not only the resources to help Informix but with the same vision as well.
"We realised how closely IBM's strategy reflected and mirrored our own," said Foy.