IBM reinforces its Appliance strategy with acquisition of Netezza

When IBM  acquired DataPower’s range of appliances in 2005, it caused some raised eyebrows; was IBM really serious about getting into the appliances game?. Subsequently the silence from IBM was deafening, and  people were starting to wonder whether IBM’s foray into the appliances market had fizzled out. However 2010 has been the year when IBM has made its strategic intent around appliances abundantly clear.

First it acquired Cast Iron, the leading provider of appliances for use in Cloud Computing, and now it is buying Netezza, one of the top suppliers of data warehouse appliances. Netezza has built up an impressive market presence in a very short time, dramatically accelerating time to value for data analytics and business intelligence applications. In addition, it has continued to extend its DataPower range, with the addition of a caching appliance and the particularly interesting ‘ESB-in-a-box’ integration appliance in a blade form factor. For any doubters, IBM has clearly stated its intentions of making appliances a key element of its strategic business plans.

This just leaves the question of why. Of course the cynical answer is because IBM must see itself making a lot of money from appliances, but behind this is the fact that this must indicate that appliances are doing something really useful for users. The interesting thing is that the key benefits are not necessarily the ones you might expect. In the early days of appliances such as firewalls and internet gateways, one key benefit was the security of a hardened device, particularly outside the firewall.  The other was commonly performance, with the ability in an appliance to customize hardware and software to deliver a single piece of functionality, for example in low-latency messaging appliances. But the most common driver for appliances today is much broader – appliances reduce complexity. An appliance typically comes preloaded, and can replace numer0us different instances of code running in several machines. You bring in an appliance, cable it up and turn it on. It offers a level of uniformity. In short, it makes operations simpler and therefore cheaper to manage and less susceptible to human error.

Perhaps it is this simplicity argument and its harmonization with current user needs that is the REAL driving force behind IBM’s strategic interest in Appliances.