June - 2009 issue > In Focus

By si Team

IBM’s old strategy of buying smaller software firms has resurfaced in 2009, with its acquisition of a U.S. based Indian founded company, Exeros. Delivering on the data discovery software of Piyush Gupta co-founded Exeros Technologies, the hardware giant IBM aims to capture the Business Analytics Optimization Consulting market.

The Exeros deal is the second acquisition for IBM in 2009, following the takeover of the email assets of Hong Kong based Outblaze, a web application service provider. The new deal is valued at $50 million and IBM intends to integrate Exeros within its Information Management Software portfolio. The company’s earlier acquisitions of Indian firms like Daksh and Network Solutions had always been confined to increasing its service portfolio, while the new deal with the Indian founded firm is a boost to its software space. The combination of hardware, software and services has become integral to IBM’s strategy to grow its revenue without entering into the low-price competition.

Acquiring small companies is part of IBM’s strategy to boost the existing portfolio and to step up its competition against Oracle, SAP, Microsoft and Sun Microsystems. Analysts see the new acquisition as a calculated move on the part of IBM, amidst the increased competition followed by the recent Oracle-Sun acquisition deal. The new deal would be a boost to its Information on Demand initiative that integrates database management solution with business intelligence. The initiative was introduced to take on other rivals like Oracle and SAP who align business intelligence with their widely used ERP solutions.

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