IBM to acquire analytics firm SPSS

Big Blue continues its quest to grab a bigger share of the exploding analytics market

For a sticker price of $1.2 billion, IBM has purchased SPSS, a company with more than 30 years of experience in the analytics field under its belt. Traditionally, SPSS focused on statistical analysis, but it recently began shifting focus to predictive analysis, which is now the hottest part of BI (business intelligence). The acquisition is just the latest in a series of moves by IBM to build up its BI portfolio.

Back in 2007, IBM bought BI vendor Cognos, which struck some analysts as indicative of a new strategy on IBM's part to push further into the BI apps market. Big Blue's BI expansion continued as recently as one month ago, when IBM announced a plan to embed some of SPSS's technology.

[ Yesterday, IBM also announced its new Smart Analytics BI products. ]

Given the ever-increasing amount of data companies deal with, not to mention the complexity of that data, analytics and BI become more important. In beefing up its BI offerings, IBM is looking to capture a bigger piece of the analytics market, which IDC expects to grow to $25 billion this year.

"With this acquisition, we are extending our capabilities around a new level of analytics that not only provides clients with greater insight -- but true foresight," said Ambuj Goyal, general manager, Information Management at IBM, in a statement released by the company. "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 outcomes."

Jim Davis, senior vice president and chief marketing officer at analytics firm SAS, an SPSS competitor, was not surprised by the acquisition, noting that "both were in need of added value in the business analytics space."

"The market has moved beyond looking for products and technology and is now focused on solving issues specific to particular industries," Davis said. "The solutions go beyond query and reporting or analytic toolsets" and require components that neither IBM nor SPSS could offer by themselves, he said.

While the deal made good business sense, Davis does see issues of funding as well as support that will need to be addressed. "Will [SPSS] get the funding needed to continue down the path of innovation? Will they be able to support platforms other than IBM's DB2, and if so, will the application be optimized to run within IBM's competitor platforms -- Oracle, SQL Server, and the emerging open source databases?" he asked.