IBM and SPSS

UPDATED BASED ON CALL – see below

In NY for IBM’s Analytics announcements. The original agenda has been overtaken by events – IBM bought SPSS this morning. Ambuj Goyal came on to talk about SPSS and focused on their predictive analytics software. SPSS is very widely used – 250,000 customers in all sorts of industries across 100 countries. SPSS, of course, has data collection, statistics, modeling and deployment products. Ambuj emphasized the importance of SPSS’ deployment capabilities as a way to bring analytics from the back office to the front office. SPSS has a highly componentized product line and IBM had been OEMing various pieces (like PASW Statistics in Cognos).

Unbelievably they are going to try and leave it at that – an analyst relations faux pas given who is in the audience (E.g. almost everyone who cares about the SPSS acquisition). Hopefully more later. Personally I think this is a huge announcement as it gives IBM a powerful analytics story in support of its business analytics and optimization business. SPSS is also something that can be tightly coupled with the ILOG rules and optimization products, acquired some months back, and their new streaming products.

IBM SPSS analyst call update

I joined the IBM SPSS call to get some more details. Ambuj came on and discuss the background for the acquisition. IBM launched the Information on Demand initiative back in 2005 to handle an information-led transformation. Companies have been conducting an application-led automation of their businesses but IBM’s IoD group has been asking if information across the organization can become a strategic asset that is managed to create a new generation of opportunities. IBM has made a $10Bn investment in this platform and this acquisition builds on this. One of the key elements of this strategy that was missing was predictive analytics. IBM and SPSS have been partners for a while. SPSS has been focusing investment on componentizing analytics and on moving analytics to the front office – to systems, to front-line staff. The acquisition helps IBM fill out its portfolio.

Jack Noonan of SPSS came on very positive about the announcement, as you would expect. The additional market reach and consulting support that IBM brings is great news for SPSS products. The match is great – I agree with Jack here – as IBM has many complementary products and offerings.

As IBM and SPSS have only just announced this there is not a lot of detail. As I have discussed in my other post IBM has announced some smart analytics systems today and the SPSS acquisition clearly gives IBM new opportunities with these systems – in particular the ability to add predictive capabilities to the systems. IBM already OEMs some bits of SPSS  and as the regulatory approvals get finished they will expand on this. IBM sees tremendous value in SPSS’ partner network and in adding SPSS to the existing IBM partner network.

IBM IoD has made 27 acquisitions in this space – including Cognos and ILOG – and has been trying to focus on delivering a complete analytic value proposition to IBM’s clients. SPSS’ predictive analytics added to IBM’s IoD stack makes this information-led transformation more possible. IBM wants analytics to become a way of doing business not just a back office thing and that means embedding analytics into more systems, something that SPSS has always been better at than most anlaytic companies. Of course the Smarter Planet initiative is strongly aligned with this – the use of information and analytics is critical to the delivery of the kind of smarter systems that smarter planet needs. Finally it was nice to hear Ambuj emphasize the additive nature of this approach – that adding analytics to existing systems is a great way to make them smarter.

I will write more about the potential for IBM and SPSS in the next few days.