Informatica is to enhance its ability to manage and control increasing data volumes after it said it would acquire application information lifecycle management (ILM) specialist Applimation for $40 million (£28 million).

Informatica is best-known for its PowerCenter suite of enterprise data integration software, whereas Applimation has a product set geared up to manage an organisation's application lifecycle. This includes software for data archiving and data provisioning, as well as data security and even application retirement.

"Our acquisition of Applimation expands our addressable market to encompass an adjacent growth category - application ILM," said Informatica CEO Sohaib Abbasi during a conference call. "The combination of Informatica and Applimation further advances our technology leadership in data integration.

He pointed out during the call that Forrester estimates that more than 80 percent of data in these enterprise applications is "inactive," yet such data consumes expensive storage and database capacity. In addition, more than 40 percent of data is estimated to be confidential. According to Abbasi, "effective lifecycle management of application data lowers storage and database costs, improves performance and ensures confidentiality."

"Together, we will offer customers a platform to access, integrate and trust all their active and archived data, while reducing total-cost-of-ownership," said Abbasi. He believes the acquisition will be a good fit, as Informatica estimates that organisations spend more than $400 million annually on application ILM solutions, with industry analysts estimating that this category is growing by more than 30 percent.

It seems that Applimation proved to be an attractive target because incorporates a broad 'application-aware' metadata for packaged applications from the likes of Oracle and SAP. This out-of-the-box support, said Abbasi, covers more than a hundred modules of Oracle, PeopleSoft and Siebel applications. It also covers SAP modules including ERP, HR, CRM, SRM, SCM and APO. "Applimation even supports custom applications developed using most major RDBMS and legacy mainframe systems," he said.

Abbasi said that Applimation has approximately 290 customers, mostly in the United States, but he hopes to be able to better push it also to the overseas markets. "We share about 100 customers," said Abbasi, "but in conversations with our customers, they are looking for us to provide them with a single platform for data movement and integration."

Despite this, it seems that Chicago-based Applimation was not profitable, but Informatica expects it to contribute $10 to $15 million in revenues in 2009.

According to Informatica's CFO, Earl E. Fry, Applimation was founded back in 1998 and under the terms of the acquisition, Informatica will be adding 70 staff to its workforce, a third of which will be R&D staff.

The acquisition is expected to close within a number of days.