IBM buys e-commerce analytics vendor Demandtec for $440 million

The move builds out IBM's Smarter Commerce portfolio of e-commerce software

IBM is buying analytics vendor DemandTec for $440 million in a bid to build out its line of e-commerce software, the companies announced Thursday. The transaction is expected to close in the first quarter of next year.

DemandTec's cloud-based applications are used by retailers to fine-tune pricing strategies and product offerings on an ongoing basis in order to improve business.

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The various modules approach this general theme from many perspectives, according to descriptions on DemandTec's website. Some allow companies to determine the best product mix on a local basis by "taking shopper demand, space, productivity, and profitability into account," it states. Another helps determine the best pricing on a given item throughout its lifecycle, while others focus on targeted marketing campaigns.

DemandTec also offers a number of partner-provided services. One of the latest features long-term weather forecasting data from Weather Trends International.

DemandTec's offerings will be rolled into IBM's Smarter Commerce family of products, which also includes the business-to-business data integration technology the company gained through the $1.4 billion acquisition of Sterling Commerce in 2010.

IBM "is redefining how brands buy, market, sell and service their customers in ways that their customers want," said Craig Hayman, general manager of industry solutions, in a statement. "Bringing science to the art of pricing and promotion is a big part of this strategy."

The DemandTec purchase will also give IBM 450 additional customers among some of the world's largest retailers, including Target and Walmart.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's email address is Chris_Kanaracus@idg.com.

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