IBM Buys What’s Left of Informix
Written By: M. Reed
Published On: May 2001
IBM Buys What's Left of Informix
IBM (NYSE:IBM) and Informix Corporation (NASDAQ:
IFMX) announced that they have entered into a definitive agreement for
IBM to acquire the assets of Informix Software (the database portion of
Informix Corporation, which remained after the spin-off of Informix Business
Solutions into Ascential Software), in a cash transaction
valued at $1 billion. IBM feels that the acquisition strengthens their
presence in the fast-growing distributed database business, a key strategic
priority for IBM. IBM's distributed database revenues grew 36% year-to-year
in the first quarter of 2001.
remains of Informix Corporation will be folded into Ascential Software
and become an independent company under the Ascential name. To attempt
to explain the somewhat convoluted genesis of Ascential Software, the
company was created in January of 2001 from what was known as Informix
Business Solutions. This division, which contained all of Informix's business
intelligence solutions, had been split off shortly after Informix acquired
Ardent Software in late 1999. For more information on the genesis of the
Ardent acquisition, see "Informix
to Acquire Ardent Software-Another Vendor's Attempt at End-to-End Data
the deal closes, expected in the third quarter of 2001, Informix, a name
that has long been a fixture in the Bay area, will cease to exist.
are aggressively investing in data management software because data collection,
storage and use are at the core of a successful e-business," said Sam
Palmisano, president and chief operating officer of IBM. "This acquisition
of Informix allows IBM to bring the benefits of leadership database technologies
to more customers faster."
the acquisition is completed, IBM has stated that it will:
Informix database business operations and personnel into the existing
IBM Data Management Solutions Division of the IBM Software Group, headed
by general manager Janet Perna.
and sell Informix's database products worldwide through an integrated
IBM and Informix sales force.
existing relationships with Informix customers and business partners,
including support for and updating of current Informix products.
by IBM is good news for Informix Software's database customers, partners,
employees and stockholders," said Peter Gyenes, chairman and chief executive
officer, Informix Corp. "IBM offers the global resources, investment protection,
support and technology leadership our customers and partners need for
the future, as well as exciting opportunities for our employees. This
acquisition also extends the reach and relevance of key Informix technologies
as they are evolved and integrated into future versions of IBM data management
announcement is not unexpected. Informix has had problems with unprofitable
quarters many times in the last few years, and has seen a steadily eroding
market share in the relational database market. IBM, on the other hand,
has had steadily increasing market share and has shown strong gains against
rival Oracle Corporation. The acquisition gives IBM access
to a large and exceptionally loyal customer base (100,000 customers worldwide),
a pool of highly skilled employees, and perhaps most importantly, a much
stronger foothold in the database market on UNIX and Windows NT, complementing
their traditionally strong presence in the mainframe and AS/400 worlds.
the positive side, existing Informix customers can now be assured that
a financially viable corporation will still provide support for the products,
whereas the continued existence of Informix as a going concern was growing
increasingly questionable. According to Steve Mills, senior vice president
and group executive at IBM Software, "Informix customers can be confident
that their investments in existing Informix products are secure. These
customers will now have a long-term growth plan that enables them to achieve
the full potential of e-Business."
a side note, it appears to TEC that Informix "just pulled a Gupta". For
those who remember Gupta in the early to mid-1990s, they were a fairly
successful database vendor with a product called SQLBase. When it got
to the point that they were only turning a profit on an application development
product called SQLWindows, they de-emphasized the database and changed
their name to Centura Software. Sound familiar? For many years we have
expected Informix and Sybase to suffer a similar fate. For Informix,
the time is now. Sybase, on the other hand, has made a remarkable comeback
in the last few years, and appears to be in the game for the long haul.
there are only two RDBMS vendors left on the landscape, IBM and Oracle.
TEC believes that, after the dust settles, IBM will have retained at least
85% of existing Informix customers (90% probability), which will undoubtedly
give Oracle cause to keep an eye out over their corporate shoulder.
Customers engaged in the selection of relational database management systems
should certainly consider IBM's offerings, but should take Informix off
the list. We consider it unlikely that IBM will put any type of marketing
push behind existing Informix database offerings, and will attempt instead
to sell IBM's own DB2 product, which will, over time, benefit from technology
integrated from Informix's products, including "datablades", which provide
support for complex datatypes such as spatial, time-series, and web data;
business intelligence technologies from Red Brick; RDBMS features in Informix
database products; and some of the features of Informix Cloudscape.
Informix customers can take comfort from the statement by Janet Perna,
general manager of IBM's data management software division, "DB2 will
continue to be the foundation of IBM's database offerings, but IBM will
continue to maintain Informix's product line. No customer will be forced
to migrate to DB2". However, TEC does consider it likely that IBM will
"stabilize" the Informix product line over time, which means that current
releases will be maintained and bugs will be fixed, but no new major releases
will be made available. Going forward, as new versions of hardware and
software are implemented in a customer's environment, continued use of
the stabilized product will become difficult to the degree of being untenable.
to this are that Informix Dynamic Server 9.3 is still planned for this
year, with a new release of XPS slated for next year. IBM has the stated
intent of revisiting the stabilization issue with existing Informix customers
and revising release schedules so that the minimum number of Informix
customers are "disenfranchised". IBM has also explicitly stated that Informix's
Arrowhead project (a product integration effort) will be discontinued,
as IBM feels that "IBM's DB2 UDB is already where Arrowhead wanted to