Yesterday IBM (NYSE: IBM) announced
it is acquiring DataMirror Corporation
(TSX: DMC) based in
approximately C$170 million (approximately $161 million USD). DataMirror is a
provider of real-time change data capture (CDC) technology with over 2,200
customers and $46.5 million in revenue last year. The official press release
stated that "IBM intends to: Integrate DataMirror with IBM’s Information
Management Software unit…(and) Employ DataMirror software to support IBM
Information Server…" The deal is
the twenty-first acquisition to support IBM’s Information on Demand business
roadmap, but we have already run into a little disagreement between analysts
and IBM on whether there is product overlap and how much DataMirror will be
integrated into the IBM Information Server.
these subjects when they’re talking to the press. An excellent blog that
addresses this in more detail (or more bluntly) is Vincent McBurney’s (a Solution
Architect for IBM’s products) "DataMirror
on the Wall who is the prettiest Information Server of all."
Information Server provides CDC and real-time access, as does DataMirror. Maybe
DataMirror’s capability is better or maybe not (of course why would IBM buy it
if it is not.)
of Kalido stated in his post "Mirror,
mirror on the wall, who is most blue of them all?" "For IBM the
acquisition adds some solid technology to its data warehouse offering and its ‘on
demand’ strategy, in this case replacing Powerpoint promises with something
that actually works." Ouch, that hurts (but agrees with Vincent’s
analysts’ data integration ratings, so it is best-in-class and IBM is only
purchasing DataMirror to enhance it even more. That’s a great positive to
customers (and stockholders too.) The broader issue is that this is another
example of what one of IBM’s competitors calls a "tuck-in" acquisition strategy.
neo-titans such as Business Objects and Cognos (until they are bought by the
titans, another post another day…) have been using the "tuck-in"
acquisition strategy to gather product functionality to incorporate into their
product suites. The titans and neo-titans have built out product suites for
business intelligence (BI) or integration capabilities through organic
(internally) development and through acquisition. These suites (or platforms)
keep expanding to be more and more comprehensive and robust. These suites are
very particularly appealing to large customers with "heavyweight"
data integration or business intelligence challenges. And the suites give the
titans the edge when it comes to analysts’ ratings and software evaluation
there are potentially other customers (or prospects) that would see it as half
empty. What could possibly be negative about this approach? Some would argue there is no free lunch and
that with that functionality come complexity and cost.
DataMirror, are successful in selling their products is that their products are
"lightweight" in comparison to the titans’ software suites. You might
infer lightweight to be a bad thing, but its interpretation is in the eye of
the beholder (or purchaser.) For large enterprises dealing with heavyweight, or
very complex and large applications, then lightweight is a negative, i.e. not
as much functionality or scalability. The heavyweight application users prefer
the software suites or platforms so they can get everything they need in one
medium business) market and many applications within large enterprises (this
may be a surprise to many software marketers!) These folks often prefer the
more lightweight applications meaning a smaller, i.e. more targeted, software
footprint and capability. Why pay for, implement infrastructure for, train for
and have people with expertise in a software suite when you only need a small
portion of its capability? The heavyweight users want the best and most full-featured
tools, while the lightweight users want the tools to match what they need. Data Mirror didn’t get 2,200 users because
their product was as capable as a heavyweight software suite, but rather
because it wasn’t.
smaller firms for tuck-in capabilities you have got to wonder if that means
there is a whole market that is being "sent-out" to look for other
vendors and products? Is this the opening for new and innovative software firms
to enter the market (and then feed the titans when they become acquired?) Is
this the opening for open source software in the business intelligence,
integration and business application markets?