In an expansion of its Information on Demand initiative, IBM is looking to buy longtime partner SPSS, which makes predictive analytics software, for $1.2 billion. The move will expand IBM's ability to offer customers solutions they can use to mine data and turn that information into a strategic business asset. SPSS officials called the two companies complementary and said the breadth of IBM's portfolio, resources and customer base will be an advantage for SPSS customers and employees.
IBM is looking to add greater predictive
analysis capabilities to its Information
on Demand software through the $1.2 billion acquisition of longtime partner
IBM and SPSS
made the announcement July 28. Officials with both companies say they expect
the deal to close later this year, pending the approval of SPSS
shareholders and federal regulators.
The acquisition will bolster IBM's
ability to offer customers solutions that enable them to more deeply analyze
information, according to IBM officials. For
example, Internet retailers can take a look at customer browsing trends to
determine which products are generating the greatest amount of interest.
Other examples include police departments being better able to allocate
crime-fighting resources, retailers able to better personalize their approach
to customers or to determine where to place a new store, health care providers
better able to improve patient care, and financial services firms more easily
acquiring and retaining clients.
IBM has plans for its Maximo software
"With this acquisition, we are extending our capabilities around a new level
of analytics that not only provides clients with greater insight, but true
insight," Ambuj Goyal, general manager of information management at IBM,
said in a statement. "Predictive analytics can help clients move beyond the
-sense and respond' mode, which can leave blind spots for strategic information
in today's fast-paced environment, to -predict and act' for improved business
Research firm IDC sees a healthy future
for business analytic software, predicting that companies will spend $25
billion on such solutions this year, a 4 percent jump over 2008. A key driver
is businesses' desire to control costs and use their resources more wisely,
according to IBM.
The move is in line with other software acquisitions IBM
has made recently as it looks to build out its software offerings that give
businesses a better grip on the massive amounts of information they collect.
For example, IBM in 2007 bought
Cognos to bolster its business intelligence capabilities.
In a brief conference call with financial analysts and reporters, Jack
Noonan, chairman, president and CEO of SPSS,
said he sees the acquisition of his company by IBM
as a "highly complementary move."
Noonan pointed to the breadth of IBM's
resources and its massive customer base as a key advantage for SPSS'
customers and employees.
"This is a transformative event," he said.
Noonan declined to offer many details about the acquisition, though he did
say that IBM officials approached SPSS
about the deal. He also didn't foresee any antitrust issues arising from the
deal, pointing out that rivals like SAS are "substantially larger" than SPSS.
One analyst questioned why IBM came to SPSS
with the offer now, given the long-standing relationship between the two
companies and IBM's perceived slowness in
pursuing predictive analytic capabilities.
Noonan said predictive analytics has been a focus of IBM's,
and that "because of the previous relationship, they know us well, and I think
their thinking [on predictive analytics] is well ahead of the industry."
IBM officials said the acquisition not
only will expand its Information on Demand software portfolio, but also will
bolster the offerings in its recently announced Business Analytics and
Optimization Consulting group and collection of Analytics Solution Centers.
IBM also has what officials call their
Information Agenda initiative, in which IBM
is working with customers to be able to turn information into a strategic
IBM will integrate SPSS
into its Information Management software offerings. Officials also said that
predictive analytics will be a key component of its drive to bring
intelligence into infrastructure systems.