IBM Will Combine Varicent With Other Analytics-Related Acquisitions
Founded in 2003, Varicent has more than 180 customers using its software, including Starwood Hotels, Covidien, Dex One, Manpower, Hertz, Office Depot and Farmers.
IBM said it will combine Varicent with its R&D and prior analytics-related acquisitions, including Algorithmics, Clarity Systems, OpenPages, Cognos and SPSS, to expand IBM capabilities in business analytics and optimization across finance, sales and customer service operations. These acquisitions are part of IBM's larger focus on analytics, which spans hardware, software, services and research.
Officials at Big Blue said the company sees enormous opportunity to apply advanced analytics to sales functions that can help organizations uncover new, untapped growth opportunities. Indeed, IBM anticipates business-analytics revenue for the company will reach $16 billion by 2015. IBM has been building its R&D and acquisition assets to define this new business opportunity.
Moreover, IBM's software business continues to be highlighted as a key contributor to the companys bottom line. Over the last decade, the profitability of IBM software has nearly tripled to more than $10 billion in 2011, and revenue doubled in the same timeframe, the company said. IBM projected its software business would become almost half of IBM's profits by 2015.
In addition, IBM has almost 9,000 dedicated business analytics and optimization consultants and 400 researchers, and has secured hundreds of patents a year in analytics. The company continues to expand its ecosystem, which consists of more than 27,000 IBM business partners; and has also created eight global analytics solution centers in Berlin, Beijing, Dallas, London, New York, Tokyo, Washington and Zurich.
These investments have enabled IBM to introduce Smarter Analytics Signature Solutions to address issues, such as fraud detection, financial operations and customer service. They have also led to breakthrough technologies like IBM Watson, a new class of industry-specific analytical technology that uses deep content analysis, evidence-based reasoning and natural-language processing to identify relationships buried in large volumes of data that can be used to improve decision making.
IBMs acquisition of Varicent is subject to customary closing conditions and is expected to be completed in the second quarter of 2012. With the closing of this acquisition, it is expected that all of Varicents employees will join IBM's Software Group.