In its second analytics acquisition in as many weeks, IBM on Monday announced it has agreed to buy Netezza in a cash transaction valued at $1.7 billion, or $27 a share. Netezza will expand Big Blue's business-analytics portfolio and set the stage for the next business intelligence battle.

Best known for high-performance analytics in a data-warehousing appliance that can handle complex analytic queries, Netezza empowers business users in every department of an organization to drive actionable insights. Netezza brings 350 clients to IBM's fold, including Time Warner, Nationwide Insurance, and Virgin Media.

"IBM is bringing analytics to the masses," said Steve Mills, senior vice president and group executive of IBM Software and Systems. "We continue to evolve our capabilities for systems integration, bringing together optimized hardware and software, in response to increasing demand for technology that delivers true business value. Netezza is a perfect example of this approach."

Business Analytics for Everyone

Big Blue is betting the combined strengths of its existing business-analytics portfolio and Netezza's intellectual property will differentiate its offering. IBM and Netezza had a pre-acquisition relationship that could make the integration smoother.

Netezza designs and develops its appliances on IBM systems. Strategic partners for many years, the companies have focused on workload-optimized systems that deliver integrated systems, software and storage for analyzing vast amounts of complex data quickly with minimal IT skills.

"It's no longer just the CIO -- every single department from finance to marketing professionals is tapping into the capabilities of analytics to draw meaningful insights," said Arvind Krishna, general manager of IBM's Information Management group. "The addition of Netezza will reinforce IBM's focus in understanding clients' needs by providing them a broader set of analytics capabilities and bringing the power of analytics right into the hands of business users at every level within an organization."

IBM vs Oracle

Last week, IBM agreed to acquire OpenPages, a private company that develops risk-management and compliance software. Financial terms of the deal were not disclosed. IBM hopes adding OpenPages to its business-analytics mix will provide a holistic and consistent approach to risk management that helps companies combine risk-management insight with performance management to drive better decision-making. Now Big Blue is aiming a direct hit at Oracle and its Exadata announcement.

"It's not a coincidence that IBM is announcing this acquisition on the first day of Oracle OpenWorld, when Oracle is announcing its Exadata product that is also focused on this in-memory architecture," said Dana Gardner, principal at Interarbor Solutions. "IBM is trying to take a little bit of thunder away from Oracle around this. Clearly these big vendors, if they are in systems and if they are in data, recognize they need to be in these new architectures as well."

In the last four years, IBM has invested more than $12 billion in 23 analytics-related acquisitions. In IBM's second quarter, its analytics business grew 14 percent. Following the close of the acquisition, IBM intends to integrate Netezza within IBM's Information Management software portfolio. Netezza has approximately 500 employees around the world.

The Netezza acquisition is expected to close in the fourth quarter.