By Siobhan Kennedy and Simon Hodgson
Looking to capitalize on the burgeoning market for business intelligence software tools, Informix Corp yesterday announced its intention to acquire Ardent Software Inc, the extraction, transformation and loading (ETL) tools vendor, in a stock swap worth about $880m.
Under terms of the agreement, which has already been approved by the boards of directors of both companies, 3.5 shares of Informix common stock will be exchanged for each outstanding Ardent share and Informix will assume all outstanding Ardent options. The deal is expected to close in March 2000.
Westboro, Massachusetts-based Ardent was formed in 1997 by the merger of Vmark Software and Unidata. With that merger, and the subsequent acquisition of O2 Technology SA, the company also has offerings in both the relational (Unidata) and object oriented (O2) database markets as well. But it is Ardent’s flagship ETL product, DataStage, that Informix really wants to get its hands on.
The database vendor has publicly stated its intention to build out its data warehousing and business intelligence portfolio following its acquisition of Red Brick Systems in December 1998. Red Brick gave Informix a low-end data warehouse, to couple with its higher-end Decision Frontier product, but the vendor still lacked any tools to enable customers to extract, transform and load data into their warehouses. It already offered Ardent’s products through an OEM deal, but according to CEO Jean-Yves Dexmier, Informix wants to become a one-stop BI shop for its customers.
Being able to offer our customers ETL tools was absolutely the thrust of the acquisition, Dexmier told ComputerWire yesterday. Our goal is to be the software provider for the internet and it is clear no company will be successful without an integrated business intelligence solution. He added: Businesses need to be able to move data from their e-commerce infrastructure to a BI system in real time, do the analysis, and circle that data back into the system.
Dexmier said Informix had chosen Ardent because its DataStage ETL suite was the leading product in the data movement and management market. In terms of size, revenue and numbers of customers. It’s the most advanced technology there is, he said.
Informix already has a low-end extraction tool of its own, called Formation, but with Ardent now on board, that will doubtless be phased out or any useful technology integrated within DataStage.
As regards Ardent’s database offerings, Dexmier said Informix will propose a migration path for the company’s relational and object oriented customers to Informix’s new Foundation 2000 product (its equivalent of Oracle’s 8i). Although the company will continue to provide support for those customers in the interim, he added that, at some point, they are going to move, and we’ll give them good migration programs and incentives to do so.
He added that Informix would also accelerate the development of Ardent’s forthcoming ETL tools for unstructured data (word processing documents, emails and so on). Those tools are critical to our goal, he said, as they allow users to locate and retrieve any web (XML) formatted data from any data source accessible through the internet. He added: Coupled with DataStage, those two technologies will give customers full access to data anywhere on the internet.
Dexmier said Ardent’s DataStage will continue to be sold separately – thereby enabling customers to use the ETL tools to extract data and set up data warehouses that don’t necessarily use Informix products – or as part of a bundle with Informix’s own BI offerings. He added that Informix is also about to launch a new web-based analytic tool, iDecide, to enable companies to analyze their on-line click stream and customer analysis.
According to Mike Norman, senior analyst for the Data Warehouse Tools Bulletin, the deal is good for Informix as it helps the company to expand into other marketplaces th
ereby relieving pressure on its database business – an area which is being increasingly squeezed by rivals Microsoft, with its SQL Server and Oracle, with its internet-based 8i database. Norman says Informix will no doubt look to expand its BI portfolio further still, perhaps with the acquisition of an analytic reporting firm, such as San Mateo-based Actuate Software.
Another analyst, Mary Hope, with UK-based IT research firm Ovum Inc, says she was surprised by the acquisition. Informix, she says, has been languishing around for some time, while Ardent has been making all the right headlines, with revenue growing at around 50% over the last six months.
Hope warns that although the deal looks sweet on paper, there are integration problems that will need fixing. By merging its Formation extraction tool with Datastage, Informix will also have to merge with the legacy data ETL technology Ardent gained when it acquired Prism last November. Ardent has taken a year to swallow the Prism technology, says Hope, who forecasts that it will take at least eight months before a combined tool appears.
Dexmier said there will be inevitable lay-offs from overlaps in administration, but engineering, product marketing and sales will not be touched. The transaction is expected to be accounted for as a pooling of interests and to add to Informix’s earnings per share in 2000, excluding non-recurring transaction-related costs, the CEO said.
