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IBM announced on Dec. 18 it would acquire a brace of data integration assets from Germany-based enterprise software company Software AG for $2.1 billion. The all-cash deal will see IBM take ownership of StreamSets, a data integration platform that Software AG bought last year, and webMethods, which Software AG bought for more than $500 million in 2007.
In today's digital workplace, there are several reasons for investing in these capabilities. By combining and unifying data from different sources into a single cohesive view, data integration brings enhanced data quality, better business intelligence and analytics and, consequently, better-informed business decisions overall.
For IBM, however, there is an even bigger incentive.
IBM's Data Integration Strategy
IBM's hefty investment in acquiring StreamSets and webMethods from Software AG is part of an ongoing strategy to build out a portfolio of cloud and AI-driven data management solutions, Peter Wood, CEO and co-founder at Block3 Group, said.
On one hand, the move reflects the growing demand for robust data integration solutions across the digital workplace, particularly in scaling operations and enhancing decision-making processes. Because StreamSets, with its innovative data integration platform, and webMethods, known for its middleware prowess, provide IBM with cutting-edge technologies that are crucial for modern enterprises dealing with massive volumes of diverse data, this investment aligns with IBM's long-term strategy to lead in high-value segments of the IT industry, especially in areas like hybrid cloud and AI.
“In my view, the integration of these platforms into IBM's ecosystem will not only strengthen its existing offerings but also position the company as a go-to provider for comprehensive data solutions, a critical aspect in today's data-driven world,” Wood said.
But beyond that, Wood said the acquisition is a game-changer for IBM because it will greatly expand IBM's capabilities in data integration, processing and management. Offering StreamSets' platform, which specializes in building and operating data pipelines, will cater to a fundamental need for businesses to efficiently process and transport data across various systems and platforms, while webMethods’ middleware solutions will facilitate seamless connectivity and integration between different systems and applications.
“For IBM, this means a significant enhancement in its ability to offer end-to-end data solutions. These new assets will likely be integrated with IBM's existing AI and cloud services, creating a more cohesive and powerful offering for clients,” Wood added.
In Woods' view, the synergy between these new acquisitions and IBM's current portfolio will lead to innovative solutions that cater to a wider range of business needs, from data migration and integration to advanced analytics and machine learning capabilities. For businesses looking to harness the power of their data, IBM’s bolstered portfolio will provide a more comprehensive, efficient and scalable solution.
IBM is also likely to use the new assets to provide enhanced data integration, management and analytics services. This can include more advanced hybrid cloud capabilities, allowing businesses to seamlessly integrate on-premises and cloud-based data systems, as well as real-time data processing and integration, a necessity for organizations looking to make timely, data-driven decisions.
The acquisition will address specific industry needs by providing customized data integration and management solutions that align with unique business requirements. “As a result, organizations can expect more flexible, efficient and comprehensive solutions from IBM, enabling them to unlock the full potential of their data and drive meaningful business outcomes,” Wood said.
Related Article: Data Migration Problems in the Digital Workplace
The Role of Business Insights
According to RealSTEEL president Kevin Ameche, IBM is investing heavily in data integration because for many of its customers, data integration is a mandatory step to extract, load, transform and deliver trusted data in real-time for using AI in businesses.
Still, the new investments also underline the importance that delivering real-time insights has for IBM, along with providing businesses with the ability to act on those data-based insights because real-time data integration allows organizations to access and analyze data as it is generated, enabling them to make timely decisions.
“IBM's investment in data integration is driven by the need to provide solutions that enable real-time data integration, ensuring that businesses have access to up-to-date information for their analytics and decision-making processes,” Ameche said.
Data integration also plays a crucial role in supporting AI and machine learning initiatives through the development of tools and platforms that facilitate the integration of data for AI and machine learning models. So, by investing in data integration, IBM aims to support organizations in leveraging AI technologies to gain insights, automate processes and drive innovation.
“IBM offers platforms like IBM Cloud Pak for Data and IBM Cloud Pak for Integration, which include automation capabilities, process mapping, AI and predictive analysis. These solutions help organizations streamline their data integration processes, improve efficiency and free up time for high-level initiatives,” Ameche said, noting this all aligns with IBM's commitment to provide comprehensive integration solutions.
Related Article: IBM Throws Its Hat in the AI Ring Again With Watsonx
Enhancing Watson
In addition to all this, the acquisitions follow IBM’s ongoing development of Watson-related developments, said Alex Sheplyakov, CTO at WiserBrand. In fact, he said, the move aligns with IBM's 2023 announcement of three main development areas: IBM Watsonx.ai, IBM Watsonx.data and IBM Watsonx.governance.
“I believe IBM is buying out these companies to secure vital resources and capabilities,” he said. “The investment in StreamSets and webMethods could be seen as a way to enhance their existing product portfolio, particularly in the realm of data integration and management. This is crucial for IBM, especially considering the growing importance of AI and big data in today's digital economy."
More to the point, the development of IBM Watsonx.ai indicates IBM's long-standing commitment to AI. By partnering with Hugging Face for sensitive models and datasets, the company is showing that it is focusing on developing robust AI solutions. And the acquisition of StreamSets and webMethods could further bolster this area by providing advanced data integration tools that are essential for AI development.
Similarly, Sheplyakov said, IBM Watsonx.data and IBM Watsonx.governance are about optimizing data collection and ensuring reliable work processes, respectively, so the integration of StreamSets and webMethods into IBM's portfolio will likely enhance these areas, offering more comprehensive and efficient solutions for data management and governance.
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“In my view, everyone wants a piece of AI because it's a huge market with immense potential. IBM's investment might indicate their intention to capture a larger share of this market,” he said. “While this could mean that IBM is seeking new markets due to potential challenges, it also has positive implications. The increased competition in the AI and data integration space could lead to better products and services, ultimately benefiting companies and users alike."