IBM Acquires Exeros

IBM announced it has acquired the assets of Exeros, a privately-held company in Santa Clara, Calif., that provides data discovery software. Financial details were not disclosed. IBM stated the acquisition further strengthens its Information Agenda strategy, which aims to help companies turn business data into a strategic asset. According to IBM, Exeros' technology can be used to automatically uncover hidden relationships between databases, helping users quickly make sense of disparate data sources.

This can dramatically reduce the cost of data warehousing and master data management (MDM) projects and can also help companies generate new levels of intelligence for identifying market trends and predicting business outcomes with greater certainty. Over the next several months, IBM intends to integrate Exeros within its Information Management Software portfolio. The deal also provides new capabilities for IBM's recently announced Business Analytics Optimization Consulting practice and its network of Analytics Solution Centers.

Since launching its first product, DataMapper, in 2005, Exeros has delivered numerous solutions focused on improving data discovery and data integration. In addition to direct sales, the company has OEM/reseller agreements in place with companies, including Business Objects, Princeton Softech and Siperian, lists Informatica and IBM as data integration partners and works with numerous services players, including Cognizant, CSSi and ProLink.

Exeros' previous relationship with IBM's On Demand group and that organization's expanding Information Agenda initiative illuminate some of the underpinnings for the acquisition, but what practical goodies does Exeros bring to the table? More importantly, why did IBM decide to buy and bring fully in-house a company whose technologies it already enjoyed via a partnership agreement?

The first question was answered during an analyst call on the Exeros deal with what nearly qualified as a Zen koan on IBM's Information Agenda strategy: You can't manage what you don't understand. Indeed, and Exeros' data discovery technology aims to increase organizations' understanding of their business information by identifying implicit relationships and organizing elements within heterogeneous data sources, creating logical groupings or business entities with ties to that data, helping companies discover how business entities are or may be transformed by those data sources.

In essence, the value of Exeros lies in its ability to automate and accelerate how businesses understand their data and data relationships, points underscored by two Exeros customer examples described during the analyst call. In the first, a large Midwestern bank that had grown through numerous acquisitions used Exeros' software to identify some 300,000 customers (nearly 30% of the bank's clientele) who had been "overlooked" by the company's marketing organization. Through Exeros' discovery process, the bank was able to include those clients in sales promotions and other revenue-generating efforts.

The second customer, a global truck manufacturer, was attempting to consolidate legacy ERP data contained in 14 customer, 9 vendor and 6 materials data sources and to build new customer, vendor and materials MDM hubs. The Exeros engagement allowed the company to complete in 1 month work that had previously taken 12 months to accomplish. In addition, using the Exeros solution, single data analysts were taking about an hour to address questions that used to take 3+ people several days to answer. Finally, Exeros proactively identified inconsistencies that would have made future consolidations difficult or impossible.

The answer to why IBM bought Exeros was clarified by Arvind Krishna, vice president of IBM's Data Management & Information Management Development, who said that virtually all IBM customers have "heterogeneous information environments," including commercial databases, such as IBM's DB2, Oracle and Microsoft, as well as legacy data sources and those associated with custom or specific business applications like SAP, PeopleSoft, Siebel, Oracle, JD Edwards and Amdocs.

In other words, Exeros offers clear and specific value to IBM's existing enterprise clients and could provide an incentive for new business clients considering the company's data discovery and MDM solutions. That same value proposition also extends to IBM's new Business Analytics Optimization Consulting practice (in the Global Services organization) and the company's network of Analytics Solution Centers, where we expect Exeros will take on a significant role. For Exeros itself, the alliance with IBM should provide access to markets and opportunities that would have been otherwise difficult to fully access.

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