IBM to acquire SPSS for $1.2 billion

IBM has offered to acquire statistic software vendor SPSS for $1.2 billion, removing yet another independent vendor from the business intelligence space.

The acquistion, IBM hopes, will allow it to capitalise on demand for business intelligence (BI) software that is growing despite the recession.

According to Gartner, the BI market grew by 21.7% to $8.8 billion during 2008. The analyst company said that industry consolidation over the past few years, which included IBM’s 2007 purchase of Cognos, and the resulting sales push was largely responsible for this growth.

"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 said Ambuj Goyal, head of IBM’s information management practice, referring to SPSS’s ‘predictive analytics’ technology, which it claims can help businesses to predict future trends by analysing historical data.

For a time, SPSS tried to associate itself with the mainstream BI industry. But when that market began to consolidate, the company highlighted its roots in statistical software (when it launched in 1968, the name stood for Statistical Package for the Social Sciences) and portrayed its technology as more mathematical and analytical than standard business reporting tools.

IBM’s $50 per share offer represents a 42% premium on the company’s share value as the markets closed yesterday. In the first quarter of this financial year, SPSS earned revenues of $72.1 million, down 8 percent from the same quarter of last year.

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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