IBM to pay $1.2 billion for analytics developer SPSS

The underlying data point to a bigger focus on business intelligence for Big Blue

IBM has agreed to acquire SPSS, a Chicago-based analytics software specialist, the companies said yesterday.

The two have come together quickly: only last month, IBM announced plans to embed technology licensed from SPSS in future versions of its business intelligence and performance management tools. Now it has agreed to buy the whole company for US$1.2 billion in cash.

SPSS specialises in predictive analytics tools that help companies mine historical business data to identify future trends that they can exploit for greater efficiency or profit. IBM sees potential applications for SPSS tools in helping financial services companies retain customers, preventing crime and picking the optimal site for a new store or factory.

IBM is intent on expanding its business analytics capabilities. In May it acquired data discovery technology from Exeros for an undisclosed sum, and in January last year it paid $5 billion for business intelligence software developer Cognos.

It also sees the sector as a rich source of consulting revenue: IBM Global Services recently created a Business Analytics and Optimisation Consulting division which the company expects will make use of products from Exeros and, now, SPSS.

IBM will continue to support and enhance the SPSS products as part of its Information Management software portfolio after the deal closes, it said. The companies expect to close the deal by the end of the year, subject to approval from regulators and SPSS shareholders.

In an unrelated deal, IBM also announced that it will acquire Ounce Labs, a Massachusetts maker of source code analysis tools, for an undisclosed sum. Ounce Labs develops software that analyses the security of other software and suggests ways to improve it. IBM expects to incorporate the company's products into its Rational software quality division.

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