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IBM to acquire analytics provider for $1.2 billion

Big Blue is looking to SPSS to improve its capabilities in business analytics and forecasting.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
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Lance Whitney
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IBM will buy analytics and information forecaster SPSS for $1.2 billion in cash, the companies said Tuesday.

IBM is paying $50 per share for the publicly traded company, which closed Monday on Nasdaq at $35.09. At 6:45 a.m. PDT, the stock had jumped to $49.16.

Chicago-based SPSS makes predictive-analytics software and solutions. Its products tap into vast amounts of customer information that companies can use to try to stay competitive.

Predictive-analytics software is used to gather opinions from customers, forecast future demand, and package the information into business analytics. By capturing and analyzing trends, the software tries to help companies develop products and services better targeted to their customers.

Big Blue has already tapped into the market for predictive-analytics software with its Information on Demand services and its new Business Analytics and Optimization Consulting operation.

IBM said it believes SPSS will provide new solutions for specific industries, such as customer acquisition for financial service companies, patient care for the health care industry, crime prevention for the public sector, and ideal store location for retailers.

"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 Ambuj Goyal, general manager of IBM's Information Management. "Predictive analytics can help clients move beyond the 'sense and respond' mode, which can leave blind spots for strategic information in today's fast-paced environment--to 'predict and act' for improved business outcomes."

Subject to approval from SPSS investors, the deal is expected to close in the second half of 2009. Following the acquisition, IBM will integrate SPSS into its Information Management software portfolio.

The SPSS buyout is just the latest move in Big Blue's drive to win a greater share of the business analytics market. In May, IBM picked up data analytics firm Exeros.