In late April 2001, IBM announced that it would acquire database vendor Informix Software for $1 billion. This acquisition gives IBM a strong lead in the overall database market over Oracle, whose database server had been running neck-and-neck with IBM DB2 in market share. Before this acquisition, IBM's business depended largely on the receding mainframe market; Oracle holds a major share, 52 percent, of the more popular desktop-database market. With the Informix acquisition, IBM's share of the desktop-database market will rise from 13 percent to about 25 percent. The deal is IBM's second largest; in 1995, the company purchased Lotus Development for $3 billion.
"This will be viewed by Oracle as a shot across their bow," said Steve Mills, the IBM senior vice president who heads the company's software division. "IBM competes extensively and aggressively against Oracle across the market worldwide today." IBM and Informix expect to close this deal in third quarter 2001. How many Informix customers will turn to DB2 as a result of the sale is unclear, but IBM says that it will continue to enhance and support Informix's UNIX and Windows NT offerings while integrating Informix products' best features into DB2. Informix has more than 100,000 customers, including Verizon Communications; Wal-Mart Stores; Sears, Roebuck, and Co.; and Sabre.