IBM Buys Alphablox To Strengthen Business-Intelligence OfferingsIBM Buys Alphablox To Strengthen Business-Intelligence Offerings

IBM is acquiring Alphablox Corp., a privately held supplier of software used to build analytical capabilities into enterprise applications. IBM will use Alphablox's technology to strengthen its position in the $7 billion business-intelligence market.

IBM said Wednesday it has signed a definitive agreement to acquire Alphablox and expects to close the deal later this month. No financial terms were disclosed.

Unlike packaged business-intelligence tools from Business Objects, Cognos, and other vendors, Alphablox's software consists of analytical modules that businesses and software developers build right into their applications. That gives users of a customer-relationship-management application, for example, to analyze customer trends. Users can also customize how they view the data using the Alphablox tools.

Embedding such capabilities into operational applications is critical because business intelligence, once an offline practice, is increasingly becoming part of companies' operational IT, says Anant Jhingran, business-intelligence director in IBM's Silicon Valley Lab.

IBM will continue to sell the Alphablox product, renamed IBM DB2 Alphablox for Unix and Windows, as well as embed its capabilities into other IBM middleware products such as DB2 Data Warehouse Edition and IBM's business-process management suite, according to Jhingran. Alphablox will become part of IBM's information-management division, and its approximately 60 employees will be offered positions with the company.

The acquisition is the 16th by IBM's software division since 2001 and the fifth by its data-management business. Previous acquisitions included Informix in 2001, Tarian in 2002, and Pasture and Cross Access last year.

Sales of business-intelligence software are expected to reach $7 billion worldwide this year and double by 2006, according to IDC. Despite that growth, business-intelligence vendors have been undergoing a wave of consolidation. Last year. Business Objects acquired Crystal Decisions, and Hyperion Solutions bought Brio Software.