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IBM to acquire SPSS in analytics push

IBM continued its aggressive push into the analytics space Tuesday with the announcement that it would acquire predictive analytics firm SPSS and launch its Smart Analytics System in the second half of 2009.

The planned acquisition, for $1.2 billion in cash, would equip IBM with SPSS’ analytics software — including tools for data collection, statistics, modeling and deployment — building IBM’s software portfolio as well as its business analytics offerings. Growth in these areas would help IBM strengthen its new Business Analytics and Optimization Consulting arm as well as its Information Agenda initiative.

“You’re seeing IBM reinvent itself,” said Eric Yau, VP of business intelligence and performance management at IBM. “Analytics is a critical theme for us going forward. Electronic health records, smart grids and risk management are all areas where deeper analytics can have a significant impact on our customers and their businesses going forward, so the Information Agenda strategy has been critical.”

The deal is expected to close in the second half of 2009, after which SPSS will be fully integrated within IBM’s information management software group. SPSS and IBM have been partners for many years, a detail that helped grease the wheels for acquisition.

Company executives expect the acquisition, and IBM’s new focus on business analytics, to help clients cut costs and reduce risk while increasing customer loyalty.

“We recognize that companies have an incredible wealth of data but continue to have a difficult time turning that into useful information that can support their business needs and decision-making needs,” Yau explained.

The new capabilities will be available to IBM clients across a variety of verticals, including financial services, healthcare, public sector, retail and manufacturing. SPSS’ 250,000 customers will be offered other IBM products in cross-sell and up-sell situations.

SPSS is IBM’s 27th acquisition in the analytics space. Overall, the company has invested $10 billion in acquisitions to improve its analytics and data capabilities, Yau said.

IBM has also invested in analytics organically. The company will launch its Smart Analytics System in September offering software, systems and storage capabilities to clients. It is designed to gather and analyze data from a variety of sources, including video, e-mail, Web sites and podcasts. The system includes analysis, dashboards, and scorecards, data mining, cubing services, text analytics, data warehouse management, storage and server platform. If the SPSS deal is approved, those predictive analtyics capabilities can be added to the offering.  

The announcements continue a multiyear effort on IBM’s part to offer more data-focused services. Earlier this year, the company established its Business Analytics and Optimization Services, an organization of more than 4,000 consultants and IBM’s first new practice line in almost a decade. The company is also establishing a network of Analytics Solution Centers around the world.

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