April 24, 2001, 4:29 PM — IBM will acquire Informix Software's database business in a cash transaction valued at $1 billion. The move strengthens IBM's hand in its battle with Oracle for relational database dominance, which was once fevered but has lately been quiet.
With the purchase, IBM reinforces the notion that pure technology still matters. It will gain some apt technologists from the Informix labs. The migration may be smooth because the companies' approaches to distributed databases were similar - similar enough for IBM to launch a few patent infringement salvos over the years. This purchase would likely settle that matter.
Once the acquisition is complete, IBM will integrate Informix database business operations and personnel into the existing IBM Software data management division, led by longtime general manager Janet Perna. In a press conference, Perna said the database market is involved in a "war for talent," and she counts the Informix regulars as true talent. "The team with the best talent will win," she said.
The Informix technologists must appreciate such comments, but they must also recall the heady days in the early 1990s when they challenged Oracle and IBM with hot new technology. There were at least a few gently taunting billboards on Highway 101, the Silicon Valley throughway, home at one time or another to both Informix and Oracle.
That was before the company stumbled badly on the acquisition of neat object-relational database technology from Illustra Corp., and before some bad accounting practices turned momentum into spin control, and finally into a near nosedive. Informix was not a safe buy for the database manager; it wasn't clear where the company would end up.
So the Informix/IBM deal is not simply about technology. It's the purchase of a somewhat distressed property. It is something of a fire-sale acquisition, although $1 billion would not be a fire-sale price for any company other than IBM.
In Informix, IBM sees a competitor in trouble. IBM is moving in to present an alternative to the worried database buyer who is thinking of ditching Informix and is being lured magnetically by the call of Oracle.
IBM said it would maintain existing relationships with Informix customers and business partners, including support for and updating of current Informix products. Viewed from that angle, this buy is on par with earlier purchases of Lotus and Tivoli, both of which had some interesting technology and some installed bases worth cultivating.
More than a few people still question that Lotus deal. But the Lotus and Tivoli purchases, along with the decision not to dismember IBM, are the main marks of the Lou Gerstner era. By and large, IBM has been successful under Chairman Lou. And there's little question that Gerstner and Steve Mills, senior vice president and group executive for IBM Software, think the magic will be kindled with this purchase.