IBM is stepping up its presence in the business analytics market, announcing that it plans to acquire Netezza.

The company has entered a definitive agreement for the Massachusetts-based firm – known for its high performance data warehouse appliances and accompanying analytics applications – with a price tag of $1.7 billion (£1.09 billion) in cash.

The deal is still waiting to be approved by Netezza’s shareholders but IBM said it expected the deal to go through in the fourth quarter of this year.

"IBM is bringing analytics to the masses," said Steve Mills, senior vice president and group executive of IBM Software and Systems.

"We continue to evolve our capabilities for systems integration, bringing together optimised hardware and software, in response to increasing demand for technology that delivers true business value. Netezza is a perfect example of this approach."

Once the deal is done, IBM plans to integrate the company into its Information Management software portfolio and will keep its 500 employees worldwide.

Jim Baum, president and chief executive (CEO) of Netezza, said: "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."