NEW YORK (AP) — IBM Corp. said Monday it has agreed to pay $1.7 billion for Netezza (News - Alert) Corp., a company that helps businesses sort through data on corporate servers.

The deal would help IBM expand in an area known as "analytics," where the company sees a major source of growth over the next few years. IBM expects to grow annual revenue from analytics services, software and hardware sales to $16 billion by 2015, up from $9 billion last year. It estimates the total annual market now amounts to roughly $100 billion.

IBM has been pushing into the analytics business through acquisitions. The company says it has spent $12 billion on 23 separate analytics companies over the past four years. Its biggest takeover in 2009 was a $1.2 billion deal for SPSS (News - Alert) Inc., a company that makes analytics software for predicting future trends.

Netezza's software and hardware systems are designed to help companies use data about their businesses to make strategic decisions. The British TV, Internet and phone service provider Virgin Media Inc. uses the technology to quickly assess how price changes or tariffs are affecting sales.

Netezza, which is based in Marlborough, Mass., with about 500 employees, also lists Neiman Marcus, Time Warner (News - Alert) Inc. and NYSE Euronext Inc. among its customers.

IBM is offering $27 per share for Netezza, a 10 percent premium over Friday's closing share price of $24.60.

Netezza shares rose $3.67 from Friday to trade at $28.27, above the offering price. That could signal that investors are expecting a competing bid.

IBM shares rose $1.60, or 1.2 percent, to $131.79.

Big tech manufacturers have been snapping up smaller companies as they compete with one another to broaden the types of products and services they offer corporate clients.

Earlier this month computer maker Hewlett–Packard Co. topped Dell (News - Alert) Inc. in a bidding war for data storage company 3Par Inc., eventually paying $2.07 billion. Then last week, HP said it would also buy the network security company ArcSight (News - Alert) Inc. for $1.5 billion, branching into an industry where IBM has also made acquisitions over the past few years.