IBM  demonstrates nano-photonic chip for Big Data
New IBM chip integrates photo-detector (red feature, left) with modulator (blue feature, right) with side-by-side silicon transistors (red sparks, far right). IBM Research

International Business Machines Corp. (NYSE:IBM), the No. 2 computer company, said it planned to acquire private StoredIQ to deepen its penetration of the market for “big data” products.

Financial terms weren't disclosed but IBM VP Ken Bisconti said all 50 employees of the 10-year-old company in Austin, Tex., will be retained when the deal closes in the first quarter of 2013.

IBM reported cash and investments exceeding $12.4 billion in the third quarter.

IBM, of Armonk, N.Y., had been “partnering” with StoredIQ since mid-2010, said Bisconti, responsible for IBM's enterprise content management operations.

Prior acquisitions of PSS Systems and Vivisimo as well as data warehousing specialist Netezza had already put IBM squarely into “big data,” he said. But adding StoredIQ's products, especially those that speed discovery of relevant data in giant databases as well as “data intelligence” made a compelling buy.

IBM is far from the only player in the market. Oracle Corp. (NASDAQ:ORCL) has competing products involving both software analytics and storage, as do VMware (NYSE:VM) and its former controlling partner, EMC Corp. (NYSE:EMC), the No. 1 storage products vendor.

Bisconti said IBM sees analyzing and managing “big data” will become a bigger problem in the future and may become a new sector he called “information economics.” He said an IBM customer managing data for a major bank said his company hadn't cleaned out any stored data since 1994.

A recent study by the Compliance Oversight and Governance Council determined that 68 percent of all data currently stored is “debris” that wastes space, is expensive to maintain and can't be useful for business.

IBM's Bisconti said there are special bottlenecks for lawyers, who need tools to tap computer databases for legal discovery, as well as for others. An advantage of StoredIQ's products so far is that they are effective and can be scaled to penetrate databases that expand capacity to terabytes or petabytes, he said.

A terabyte is a trillion bytes of data, while a petabyte is 1,000 terabytes.

StoredIQ will be incorporated into IBM's software group.

Shares of IBM fell 6 cents to $195.63 in late Wednesday trading.