Consolidation revisited

IBM’s purchase of statistics software vendor SPSS for $1.2 billion, for example, marks a return to consolidation in the business intelligence (BI) sector. The acquisition, which represents a 42% premium on the acquired company’s share value shortly before the deal was announced, will allow IBM to capitalise on BI demand that is burgeoning despite the recession.

The company says that the predictive analytics software produced by SPSS, which predicts trends based on historical analysis, will give greater foresight to its BI stack. SPSS joins the jewel in the crown of IBM’s information management portfolio, Cognos, which the company bought for $5 billion in 2007. IBM has placed heavy bets on BI and analytics, both with its long-term Information on Demand (IOD) strategy, which envisions a future in which
BI is embedded in business processes, and its strategy announced earlier this year to build business analytics service centres in cities around the world, including London and Beijing.

The computing giant also bought Massachusetts-based Ounce Labs, a source-code analysis vendor that scans for security vulnerabilities early in development cycles and theoretically reduces the much-higher cost of patching them later; IBM cites figures from the National Institute of Standards and Technology (NIST) in the US, estimating that 80% of development costs are spent identifying and fixing defects.

Elsewhere in the security space, antivirus and intrusion detection vendor McAfee will strengthen its ‘security-as-a-service’ portfolio with the acquisition of managed security services firm MX Logic for $140 million. The company provides on-demand services ranging from email and web filtering to archiving and continuity.

McAfee’s purchase represents an aggressive push into the software-as-a-service market, and reflects the fact that, despite the recession, security remains a significant growth industry: the company’s enterprise revenue was up 21% in the second quarter.

In early August 2009, German business infrastructure software maker SoftwareAG made a 477 million takeover bid for a 48% stake in its compatriot IDS Scheer, a pioneer in business process management (BPM) software.
That IDSScheer attracted a larger suitor came as little surprise – its technology is held in high regard. But many analysts had expected SAP, the giant of the German software industry, to be the company’s eventual owner. Did SoftwareAG, which already has BPM technology in its portfolio, pay for the right to block a SAP/IDS Scheer tie-up in the future?

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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