IBM's SPSS buy to revitalise BI market

IBM is to pay $1.2bn for predictive analytics firm SPSS

Industry experts have broadly welcomed IBM's proposed $1.2bn (£729m) acquisition of predictive analytics firm SPSS as a smart move, predicting that it could start a new spending spree by rivals in the space.

IBM is swooping on the Chicago-based firm to help expand its Information on Demand software portfolio and business analytics capabilities, and help customers reduce risks, cut costs and increase profits through predictive analytics, the firm said.

"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 of IBM's Information Management division.

"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."

Ovum analysts Tony Baer and Madan Sheina argued in a research note that the move fills a neat hole in IBM's business intelligence capabilities, adding that IBM's global services offers "vertical industry templates that could provide opportunities to expand SPSS' text and predictive analytics into full-blown vertical solutions".

Gartner analyst Dan Sommer, meanwhile, argued that the move is likely to put pressure on the main player in the predictive analytics space, SAS, and could force Oracle and SAP, which had an agreement with SPSS, into making acquisitions in the space.

"SAS was able to reign freely and charge high prices, so this will put them under greater pressure than previously," said Sommer. "The large vendors will all follow with something similar. It's all about parity, [although] SAS is too big to swallow and has too much cash."

SAS has responded in typically bullish fashion by stating that it will diff erentiate by offering an integrated suite of tools, rather than "a set of hastily cobbled together tools from different acquisitions aligned to a major player's propriety architecture".

"The deal shows that SPSS was unable to successfully cross the chasm from being a desktop tools provider to an extensible framework. Therefore it needed to sell itself to IBM," said SAS UK managing director Ian Manocha.