- Updates with comment -
July 28, 2009 - IBM and SPSS Inc. today announced that the two companies have entered into a definitive merger agreement for IBM to acquire SPSS, a publicly-held company headquartered in Chicago, in an all cash transaction at a price of $50/share, resulting in a total cash consideration in the merger of approximately $1.2 billion.
The SPSS portfolio of Predictive Analytics Software (PASW) products - data collection, statistics, modeling and deployment - is designed to capture attitudes and opinions, predicts outcomes of future customer interactions, and then act on these insights by embedding analytics into business processes. SPSS solutions address interconnected business objectives across an organization by focusing on the convergence of analytics, IT architecture and business process.
With this purchase, IBM expands its focus on business analytics technology and services to meet growing needs to cut costs, reduce risk and increase profitability through predictive analytics capabilities, which include advanced data capture, data mining and statistical analysis. These capabilities help organizations analyze trends and patterns found in historical and current data to drive new forms of competitive advantage by predicting potential future outcomes and optimizing all elements of their businesses, including product and service offerings for customers.
This acquisition is expected to expand IBM's Information on Demand (IOD) software portfolio and business analytics capabilities, including the range of offerings available through IBM's new Business Analytics and Optimization Consulting organization and network of Analytics Solution Centers. According to the IBM Web site, the IBM Business Analytics and Optimization Services draw on expertise in vertical industries, research, mathematics and information management to improve the speed and quality of business decisions while better understanding the consequences and business outcomes of those decisions.
The acquisition of SPSS by IBM provides them the ability to directly assist organizations in applying analytics to optimize business processes especially those that are customer oriented, says Mark Smith, Ventana Research CEO and EVP of research. "The acquisition also provides IBM a range of technology that raises their competency in the market and meet their mission to provide the most sophisticated analytics and compete against Oracle and SAP.
As IBM rounds out its BI portfolio, Forrester Research analyst Boris Evelson sees implications for competitors such as Business Objects, which has an existing OEM agreement with SPSS. "That means [Business Objects parent] SAP now has to do something."
In an email to Information Management, SAP replied that the partnership with SPSS is "working well" and that SAP does not expect IBMs intended acquisition to impact the relationship. "We have a growing number of customers as a result of this agreement and we will continue to partner with IBM and evolve our predictive services portfolio to meet the needs of our customers."
But Evelson says plenty of potential acquisition targets remain in the advanced analytics realm, including KXEN and others. "I think we'll see a battleground for the next year or so just like we saw in traditional BI over the last couple of years. I think the next battleground is predictive analytics and after that more opportunities and holes to plug in BI."
Following the acquisition, IBM intends to integrate SPSS within IBM's Information Management software portfolio and into the many industry offerings already available. The acquisition is subject to SPSS shareholder approval, applicable regulatory clearances and other customary closing conditions. It is expected to close in the second half of 2009.
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