IBM to buy SPSS Inc.

Perhaps given IBM's moves in recent years to build up its software business and the hype over predictive analytics, this wasn't too surprising.

Specifically, IBM is looking to serve corporate clients that want to use data to predict future trends and spot consumer patterns and behaviors. This process of using data to make better business decisions is called predictive analytics, the area of expertise that SPSS will bring to IBM and an area of particular emphasis at SAS, a SPSS competitor.

IBM said its expansion into predictive analytics is a response to client demand to use the capabilities to cut costs, reduce risk and increase profits. IBM previously broadened its reach into the business intelligence space in 2007 with the $5 billion purchase of Canadian company Cognos, another SAS competitor.

IBM Cognos and SPSS already had a co-selling agreement in place, but the OEM deal will enable IBM to embed and tightly integrate the statistics tools with Congos BI software. IBM is essentially buying a legacy vendor whose software it can sell to its huge customer base and then offer professional services which is IBM’s brand.

Who loses from IBM’s acquisition of SPSS? Fundamentally, one can’t help think that SAP missed the boat by not seizing the opportunity to acquire partner SPSS, whose Clementine technology it OEMs, has integrated with its BI technology, and sells as SAP BusinessObjects Predictive Workbench.

SAP have a partnership with SPSS, via BO so it would make sense for them to purchase SPSS to give them the embedded analytics pedegree they need. Was this IBM move to cut back the SAP expansion? Just wondering what SAP-Business Objects must be thinking of making a move too.

Perhaps more interesting will be the market outcome. Privately held SAS has never indicated a desire to be acquired, yet everyone has a price. With SAS revenue maybe 3 to 4 times greater than SPSS, may be Oracle or SAP or Microsoft to go after SAS with "billions of dollars" before too long.

In the realtime world, analytics is going to be the name of the game and being able to predictive for real pays the way (http://www.techcrunch.com/2009/07/28/monster-merger-ibm-buys-spss-for-approx-12-billion/).