(12:16 EDT: Updates with comment)

September 20, 2010 - IBM has announced plans to acquire Netezza, a provider of analytic database and data warehousing appliance technology for approximately $1.7 billion.

Data warehouse appliances combine hardware and software in a preconfigured solution and form factor that simplifies the creation, performance tuning and operation of databases used for business intelligence.

At a press conference, Netezza President and CEO Jim Baum said a big part of Netezza's strategy has been to make products that "bring analytics to the masses" in operational areas such as sales and marketing, where the focus is on the applications and not the development or tuning requirements of the system. "That's really where the ultimate business value is created," Baum said.

"The rate and pace of data which is being gathered in ever-increasing quantities has accelerated the opportunity around information and analytics and is a top priority for organizations around the globe," said Arvind Krishna, IBM Software Group general manager. Krisna says analytics are a key growth driver for IBM that is projected to grow from $9.4 billion in 2009 to to $16 billion by 2015.

Baum and Krishna said IBM expects to maintain key technology partnerships already held by Netezza, but that the disposition for the sales and system integration teams would not be determined until the deal gains final approval.   

In the last four years, IBM says it has spent $12 billion to acquire 23 analytics-related companies.

In a similar competitive move, EMC purchased Greenplum in July, leading to speculation around Netezza, ParAccel and even Teradata, the pioneer provider in the space.

The database space has lately become notably competitive and a hotspot of acquisition. In May, SAP bought database specialist Sybase for approximately $5.8 billion.

HP very recently won a public bidding war with Dell to acquire 3Par, which eventually sold for $2.4 billion.

The timing of IBM's announcement coincides with the start of Oracle's annual OpenWorld conference. Oracle, which moved aggressively into the hardware business with the acquisition of Sun Microsystems, competes in the high-performance data warehousing space with its Exadata and other products.