IBM is to acquire human resources solutions provider Kenexa for about $1.3bn (£821m) as it looks to compete against the likes of Oracle, SAP and Salesforce.com in the software-as-a-service (SaaS) market.
Kenexa uses cloud-based technology that attempts to integrate people and processes through its social recruitment and talent management solutions.
The Pennsylvania-based company currently has more than 8,900 customers across a variety of industries including the financial services and pharmaceutical sectors.
The acquisition, which is worth $46 (£29) per share, will further bolster IBM's business analytics software offerings, which received a boost earlier this year when IBM bought cloud-based analytics firm DemandTec for $440m (£277m) in February.
Although IBM said that Kenexa would complement its social business and HR business services divisions, it did not state whether Kenexa's 2,800 staff would be integrated within a particular division or continue as a standalone company.
The deal is expected to close in the fourth quarter of 2012.
IBM has also released a new zEnterprise Cloud Mainframe, dubbed the zEC12, which it says is the fastest and most powerful to date.
IBM said that the product is a result of over $1bn (£632m) in research and development investment, and will feature technologies that demonstrate the growing need to secure and manage critical information with the System z mainframe.
The new mainframe is designed to help enterprises harness big data, by incorporating better analytics tools, providing 50 per cent more storage and keeping data more secure than its predecessors, IBM claimed.
Furthermore, IBM said the mainframe will use the world's fastest chip running at 5.5GHz – a 25 per cent increase on the previous model in processing speed. It may be used by a variety of workloads including hybrid clouds, while users can consolidate thousands of distributed systems on to Linux on zEC12 to lower IT operating expenses.
It is the first mainframe to include internal solid state technology with Flash Express, which aims to improve the performance of data-intensive applications or workloads where optimal service levels are vital.
The new mainframe is expected to ship in September.
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