International Business Machines Corp. (NYSE: IBM), the No. 2 computer company, said Wednesday it will acquire private Vivisimo, a data analytics specialist, to bolster its push into handling Big Data.
Terms for the acquisition of the Pittsburgh-based venture-backed company founded in 2000, weren't disclosed. IBM, in Armonk, N.Y., reported cash and investments exceeding $12.3 billion as of March 31.
Vivisimo gives IBM tools that are essential for technology, said Arvind Krishna, general manager for information management in the IBM Software Group, in an interview.
Rather than partner with Vivismo, IBM decided to buy it outright, bringing in about 120 employees as well as its patents, trademarks and codes.
When it comes to manipulating so-called Big Data, or the trillions of bytes of data generated by enterprises, smartphones and automated systems like EZ-Pass, Vivisimo's technologies have two unique propositions, Krishna said.
First, the software allows users to conduct so-called federated search, or the ability to do risk analytics in diverse data silos, rather than in one place. IBM's Cognos products, also acquired through acquisition, don't do that.
Second, the Vivisimo software permits analytics to be scaled, from a terabyte, or a trillion bytes of data, to sizes 10 or 100 times larger, Krishna said.
The IBM executive said rivals in the sector such as Oracle (Nasdaq: ORCL), the world's biggest database developer; Hewlett-Packard Co. (NYSE: HPQ), the No. 1 computer company, and Germany's SAP (NYSE: SAP), have only a small fraction of this capability.
To be sure, last year, Oracle acquired private Endeca, of Cambridge, Mass., for as much as $900 million, Nomura Securities estimated, to obtain its unstructured data patents and software. Endeca's Latitude product is able to sift through massive piles of data using its MDEX Engine database software.
He added one of the biggest advantages is that Vivisimo's software is especially desirable for manipulating and analyzing unstructured data, which has been used already by customers such as the U.S. Social Security Administration and Defense Intelligence Agency, as well as consumer products giant Procter & Gamble (NYSE: PG).
Working With Cloudera
IBM also said it was expanding its own big data platform to work with Apache Hadoop, the open source software associated with massive systems of unstructured data distributed by private Cloudera, of Palo Alto, Calif. Cloudera also supports Oracle and other software rivals in the sector.
Last week, IBM acquired Varicent Software of Toronto, another private company whose products automate data collection in sales, human resource and financial departments. Terms for that deal were also not disclosed.
Vivisimo, a spinoff of Carnegie-Mellon University, started with $500,000 in seed capital and a $1 million grant from the National Science Foundation; it previously raised $4 million from North Atlantic Capital and $1.6 million from North Atlantic Capital.
IBM shares were at $203.57, up $3.57, at the close on Wednesday.