Editor’s note: IBM’s acquisition of Y Combinator-backed startup Compose should deliver multiple benefits for IBM, driving its “cloud” strategy forward, conclude analysts Geoff Wollacott and Jilian Mirandi at Technology Business Research.

HAMPTON, N.H. – The Compose acquisition gives IBM (NYSE: IBM) more options to extend to native cloud developers, leveraging multiple databases with container-based methods.

IBM acquired startup Compose, a Y Combinator-backed Database as a Service startup, for an undisclosed amount last week.

Originally a MongoDB specialist, Compose offers services around MongoDB, Elasticsearch, RethinkDB, Redis and PostgreSQL, mitigating database back-end concerns for mobile and Web developers. Further, Compose has been working with container technology since, as company executive articulated, “before the Docker train got going.”

Compose currently runs on Amazon Web Services (AWS), Azure and SoftLayer and will be folded into the BlueMix development platform quickly. Compose states it has over 3,600 companies using its services that have spun up over 100,000 databases so far. With offices in San Mateo, Calif., and Birmingham, Ala., Compose will operate as usual until after the acquisition closes, and current users will not be impacted by the change.

There are several strategic implications from the Compose acquisition:

 Bolstering the overarching DataWorks architecture, IBM continues developing to ingest disparate data sets into the Watson cognitive engine and facilitate the data scientist and business analyst utilization of the information streams.

 Broadens the appeal of the IBM ecosystem to the developer community focused on mobile and Web application development

 Adds another suite of services to layer on top of the SoftLayer/BlueMix infrastructure to continue “spinning the meter”

 Further builds out database-agnostic development and analytics capabilities critical to remaining a dominant technology advisor to businesses pivoting into the insights economy

 Acquires deep container development expertise in critically short supply in the market as container development activity accelerates at an extremely rapid rate within the industry

Developers and businesses will take different journeys to the cloud, and the Compose acquisition enables both paths

Enterprises rapidly integrate legacy systems of records with native cloud applications, fusing them through analytics and delivering timely business insights. With just 5% of systems of engagement data being utilized compared to 80% of systems of record data, integrating, cleansing, mining and analyzing data become more mission-critical to business.

The ability, therefore, to ingest as many disparate data sets as possible, becomes mandatory for continued market relevance during this period of unprecedented industry disruption. Database interoperability built on open-standard infrastructure becomes imperative, and hence TBR believes IBM hit the bull’s-eye with the Compose acquisition.


About TBR: Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com