IBM To Buy Data Compression Firm Storwize

IBM is on the verge of acquiring Israeli data storage technology vendor Storwize, Reuters has reported.

Storwize has developed real-time data compression software that it claims can increase storage capacity by up to 90 per cent without degrading performance. Both companies have refused to comment on the news of the takeover.

IBM is taking over the start-up for a reported $140 million, between three and four times the company's investment value, in a deal that is expected to close in July. Storewize will be the IBM's seventh acquisition of 2010, and the second Israeli company.

Israelis Gal Naor and Jonathan Amit founded the company, which is now based in Marlborough, Massachusetts, in 2004. The firm currently has 70 workers developing data compression software for network storage ecosystems.

So far, nearly $39 million has been invested in the company by partners including EMC, HP, IBM, Sequoia Capital, Bessemer Venture Partners, Tenaya Capital, Tamares Group and Tokyo Electron Device.