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Analysis: Ascential and IBM Minimal Overlap, Lots of Promise

Many customers will welcome a tight coupling between Ascential and IBM technologies

• By Stephen Swoyer
• March 30, 2005

There’s a lot to like in IBM Corp.’s $1.1 billion acquisition of Ascential Software Corp., but—as the business intelligence (BI) and data warehousing brain trust at Forrester Research points out—there are a few concerns, too.

For the most part, the Forrester team of Phillip Russom, Ken Vollmer, and Lou Agosta echo and amplify the perspectives of other industry watchers on the deal. In at least one key respect, however, the Forrester researchers contribute new insight: By the end of 2004, the trio says, Ascential was no longer playing second fiddle to Informatica Corp. in the data integration market. In fact, Russom, Vollmer, and Agosta write, the two companies were effectively tied for the top spot in the data integration space for 2004 according to Forrester’s own market research data.

That puts IBM’s perspective of Ascential in a slightly different light, of course. In Ascential, Big Blue gets a proven provider of ETL and other data integration technologies. It’s also effectively taking the number-one provider of ETL and other data integration technologies off the market.

Even though IBM officials have stressed Big Blue’s intention to maintain Ascential’s core products as standalone offerings, the Forrester researchers note that some Ascential customers are already apprehensive about the long-term viability of the company’s offerings—at least as usable standalone tools.

“IBM must also give Ascential Software products independence. Other organizations want enterprise ETL from an independent pure-play vendor, largely because ETL tools from database and BI vendors work best with those vendors' platforms, and not so well in broad enterprise-scale use in heterogeneous environments,” the researchers note. “With platform vendor IBM acquiring pure-play Ascential, users are already fretting over the loss of independence, the very attribute that drew them to a pure play.”

So who’s left in the ETL pure-play space? The Forrester team cites Informatica, along with DataMirror, Evolutionary Technologies International (ETI), Pervasive Software (which recently acquired another ETL pure play, Data Junction), and Sunopsis. Oddly, Forrester makes no mention of ETL specialist Ab Initio.

Regardless, they say, Big Blue needs to do something—fast—to reassure existing users of Ascential’s flagship ETL offering. “IBM needs to declare the independence of DataStage to assuage concerned users. Otherwise, the acquisition will become a lucrative opportunity for Informatica to steal enterprise ETL deals from IBM,” they write.

All told, however, Russom, Vollmer, and Agosta think the acquisition is probably a win-win for both IBM and Ascential. The trio cites IBM’s excellent track record with past acquisitions, particularly in the data integration and content management spaces, such as Crossworlds Software, Holosofx, Venetica, and Alphablox.

“The merger is fully consistent with IBM's commitment to growing its integration platform,” they write. “The focus is on structured data, and the acquisition brings IBM up to date in data integration with Ascential Software's leading-edge product Ascential DataStage. It also fills holes in IBM's offering in areas like information quality and data profiling.”

What’s more, by one common metric of acquisition success (product overlap), IBM and Ascential are essentially starting tabula rasa, the Forrester brain trust notes. “Although both IBM and Ascential Software have several products for integration and related functions, there is surprisingly little overlap between the two vendors' product lines,” they write, noting that Big Blue does market a small, departmentally focused ETL tool called Warehouse Manager that might be said to compete with DataStage: “Since the two products serve different audiences, they are complementary. Likewise, IBM recently acquired SRD, which offers consumer identification software. That's an information-quality function, but it's complementary to those of Ascential QualityStage.”

And then there are all of the other things Ascential brings to the table, including data quality, data profiling, metadata management, and real-time data integration. “Although these are not data integration products per se, they all relate to data integration, because they are used closely with it, and the growing number of Ascential Software customers using these together attests to this fact,” Russom, Vollmer, and Agosta point out. “Therefore, these products, too, contribute to IBM's growing arsenal of integration technologies and related technologies.”

Finally—and in an interesting twist—the Forrester team says some potential users will undoubtedly welcome the tight coupling of Ascential technologies with Big Blue’s existing data integration offerings.

“Many users are progressively looking for what Forrester calls a ‘universal integration platform,’ which offers multiple integration technologies that all interoperate deeply as part of a common platform,” they write. “This enables an enterprise to grow an integration infrastructure over time, without the time and expense of integrating a multivendor solution. And this is one type of customer that IBM's integration infrastructure targets. Ascential and IBM today offer the market's most extensive multitechnology integration platforms. Combining them will give IBM an even greater offering that provides users a rich set of integration options and related functions from a single source.”