IBM to pay US$1.2b for biz intelligence software firm

Business Times - 30 Jul 2009

(NEW YORK) IBM took a big step to expand its fast-growing stable of data-analysis offerings by agreeing on Tuesday to pay US$1.2 billion to buy SPSS Inc, a Chicago-based maker of software used in statistical analysis and predictive modelling.

Major technology companies have made a flurry of such purchases in recent years, grabbing suppliers of software that helps businesses and governments organise and analyse data to make better decisions. The industry segment is broadly known as business intelligence software.

In the last couple of years, IBM, Oracle, SAP and Microsoft have collectively spent more than US$15 billion buying makers of such software.

In the recession, corporate spending on technology in general is being trimmed. But business intelligence software, analysts say, stands out as an exception because it is seen as a tool to help identify cost-cutting opportunities and emerging market trends.

The IBM bid for SPSS, analysts say, could well touch off a second wave of acquisitions in the business intelligence sector. SPSS, they say, specialises in predictive analytics, a tool that typically works with a business-intelligence software engine. In late 2007, IBM bought Cognos, which became its business-intelligence software foundation, for US$4.9 billion.

Predictive analytics technology plumbs information in corporate and government databases, and increasingly data on the Web or data streams from sensors on things as diverse as food shipments to cell phones.

The software can help look for developing trends in markets or patterns of behaviour\. \-- NYT