True Blue

IBM promises commitment and continuity after Informix acquisition

When IBM and Informix Corp. announced that they had signed an agreement for IBM to acquire Informix's database business in a $1 billion cash deal, speculation about the future of Informix's customers and technology was rampant. As a longtime rival with a competing database product, can IBM be trusted to continue to support and market Informix software?

According to Jeff Jones, senior program manager of the data management group at IBM, the reasons behind the $1 billion acquisition of Informix were two-fold: To access Informix's strong technology portfolio, and more important, to double IBM's database business on Unix and Windows NT/2000 with the inclusion of Informix's 100,000 customers. This acquisition will make IBM more competitive with its main rival, Oracle, which outpaced IBM's DB2 in Unix and NT markets in 1999, according to Gartner Dataquest. Although Oracle and IBM have 31 percent and 30 percent respectively of the $8 billion database market, DB2 is largely installed on mainframes.

However, if a major reason behind the decision to acquire Informix is its customer base, then IBM has a challenge in getting the message to customers that they won't be at risk or shortchanged. Jones said these concerns are largely perceptual, and feedback from Informix customers indicates that most trust IBM to keep its promises, but competitors are trying to close in on Informix's customer base.

Not surprisingly, Oracle is encouraging defection from Informix to Oracle with incentives and by trying to raise doubts about IBM's long-term commitment to Informix technology.

IBM is fighting back by challenging Oracle's credibility. Jones stresses, "Oracle would have you believe that [Informix] attrition rates are high, but IBM has found no evidence to support that claim." IBM and Informix are working hard to get the message out to Informix customers and partners that they will continue to see commitment and continuity in the Informix line.

The main reason that Informix customers are so loyal is because of the technology, but that loyalty has been severely tested by Informix's rocky financial status. Jones relates that reactions from recent IBM meetings with International Informix User Group members have largely been ones of relief that they will be with a stable company with a strong customer commitment. Companies using both Informix and IBM systems also welcome the idea of dealing with one company for their distributed databases.

But analyst reactions have been mixed. In a special to CNET News.com, Betsy Burton, a Gartner Inc. analyst, predicts that IBM "will move aggressively to drive Informix customers over to DB2," incurring migration costs within the next 18 to 24 months (April 24, 2001).

Carl Olofson, program director of Information and Data Management at International Data Corp., believes that IBM can be trusted to follow through and retain the Informix development teams. Olofson said, "IBM has shown itself capable of maintaining parallel tracks of technology when there is a market need," such as its WebSphere and Lotus Domino development. In the end, the benefits of maintaining this loyal customer base will outweigh any efficiency that would be gained by merging the product lines.

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