AP, LTW

RESEARCH TRIANGLE PARK, N.C. – IBM (NYSE: IBM) says it has agreed to buy data storage company Netezza (NYSE: NZ)) for about $1.7 billion in cash.

software and hardware systems are designed to help companies use data about their businesses to make strategic decisions.

The personnel department of a company, for instance, could use tools provided by Netessa to figure out how their employee salaries stack up against the industry average.

IBM Corp. said it is offering $27 per share for Netezza, a 10 percent premium over Friday’s closing share price of $24.60.

The technology Netezza provides is referred to as "analytics," an area where IBM said it has made 23 acquisitions totaling $12 billion over the past four years.

"IBM is bringing analytics to the masses. We continue to evolve our capabilities for systems integration, bringing together optimized hardware and software, in response to increasing demand for technology that delivers true business value. Netezza is a perfect example of this approach," said Steve Mills, senior vice president and group executive for IBM Software and Systems. "Netezza strongly complements our business analytics capabilities and client base. Together, we have the opportunity to quickly leverage the technology and accelerate the offering."

Netezza shares climbed above the offered price in pre-market trading, rising $3.15, or 12.8 percent, to $27.75. IBM shares slipped 25 cents to $129.94.

Netezza, which is based in Marlborough, Mass., with about 500 employees, lists Neiman Marcus, Time Warner Inc. and Virgin Media Inc. among its customers.

“Our vision of an appliance-based Intelligent Economy aligns very well with IBM’s Smarter Planet strategy. Netezza appliances set the standard for performance and simplicity in data warehousing and analytics,” said Jim Baum, CEO of Netezza. “Our customers choose our appliances for their fast time to value and how they simplify analytics against big data. Together with IBM, we are looking forward to extending our capabilities to a much broader market.”

IBM, which is based in Armonk, N.Y., predicts analytics will be one of its main sources of growth over the next few years, estimating the total annual market at roughly $100 billion in software, hardware and services revenue.

Big tech providers have been snapping up smaller companies as they compete with one another to broaden the types of products and services they offer corporate clients.

Earlier this month computer maker Hewlett-Packard Co. topped Dell Inc. in a bidding war for data storage company 3Par Inc., eventually paying $2.07 billion. Then last week, HP said it would also buy the network security company ArcSight Inc. for $1.5 billion, branching into an industry where IBM has also made acquisitions over the past few years.

IBM employs some 10,000 people at its campus in RTP.

Get the latest news alerts: at Twitter.