Capstone' to IBM's IOD Strategy} 

'Capstone' to IBM's IOD Strategy

Allan Krans, an analyst with Technology Business Research, called the SPSS acquisition a "capstone" to IB

By Jeffrey Burt  |  Posted 2009-07-28 Print this article Print

itle='Capstone' to IBM's IOD Strategy} 

'Capstone' to IBM's IOD Strategy

Allan Krans, an analyst with Technology Business Research, called the SPSS acquisition a "capstone" to IBM's IOD strategy.

"Starting with the base hardware, moving through core management, database and business intelligence offerings, IBM is providing all of the tools customers need to store, manage and utilize their data to meet business needs," Krans said in a report. "The addition of Cognos provided cutting-edge tools for drawing conclusions regarding existing data, while the purchase of SPSS allows customers to look to the future, identifying trends in data that predict future events."

Predictive analytics software is getting a lot of attention from businesses, with a key driver being the global recession. Companies are confronted with not only shrinking budgets but also the need to reduce risks and drive business. Predictive analytics software is the other side of the coin from BI. Where BI software answers the historical questions of what happened and why, predictive analytics is focused on taking that information to predict future trends.

"In a lousy economy, you have to do everything you can to get that customer dollar," Clay Ryder, an analyst with the Sageza Group, who was at the IBM event, said in an interview. "It may sound crass, but it's true."

The more a business can learn about the customer and their buying habits, the more it can target products to that customer. It also improves the customer's experience with the business.

"If you can be more in tune with the needs of the customers, it's better than being just one of the many [companies] looking to sell products," Ryder said.

Given that need, businesses are looking to IT vendors not to simply sell them technologies, but to sell them solutions that will help their businesses. Jim Davis, senior vice president and chief marketing officer for SAS, said companies like SPSS and Business Objects were finding themselves increasingly out of step with the demands of businesses.

Given the poor economy, "businesses don't just buy technology anymore, they buy [technology] to solve a business problem," Davis said, adding that SAS for the past couple of years has been pushing a solutions-based approach.

That seems to have worked for SAS, which recorded a record $2.26 billion in revenue in 2008. Davis said that is attributable to SAS not only offerings solutions, but also the demand for predictive analytics in a tough economy.

He and other SAS officials expect that demand to grow, enough that the company three years ago-in conjunction with North Carolina State University-started a graduate degree program in data analytics.

As far as IBM's acquisition of SPSS, Davis said it made sense for both Big Blue and SPSS. However, given that IBM already had a reseller and OEM relationship with SPSS, it didn't really add anything to IBM's arsenal.

Sageza Group's Ryder said the move is important to IBM, but the real test will be what IBM does with the SPSS technology over the next couple of years.

Others agreed. Forrester's Kobielus said he expects IBM to build out the brand and phase out its own Intelligent Miner technology, which has become part of its InfoSphere portfolio. IBM officials also need to figure out what to do with the company's OmniFind solutions, which offer some similar functions as SPSS' tools.

IBM also needs to figure out how SPSS technology will fit in with its InfoSphere Balanced Warehouse database analytics offerings.

What also needs to be determined is how IBM's rivals will respond. Analysts said they expect more similar acquisitions as players like Oracle and-more likely-SAP react.

"One can't help but think that SAP missed the boat by not seizing the opportunity to acquire partner SPSS," said Kobielus, noting that SAP OEMs SPSS' Clementine technology.

TM Capital's LeBlanc agreed.

"SAP has been less aggressive in this area and will be forced to consider acquisitions of smaller vendors in the space, such as Angoss, Kxen, Portrait Software or ThinkAnalytics," he said.

In a prepared statement, SAP officials said that the partnership between SAP and SPSS has been a good one, and that they don't expect that to change under IBM's ownership. SAP will continue to partner with IBM, they said.

They also said that SAP offers predictive analytics capabilities through their BusinessObjects offerings, and that they plan to enhance those capabilities in the future.

Senior Editor Darryl K. Taft contributed to this article.



Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel