IBM to Acquire SPSS

IBM's $1.2 billion bid to acquire the Chicago-based business analytics vendor is expected to close later this year.

IBM (Armonk, N.Y.) and SPSS (Chicago) has entered into a definitive merger agreement to acquire business analytics software provider SPSS in an all-cash transaction at a price of $50 per share, resulting in a total cash value of approximately $1.2 billion, according to an IBM source. The acquisition, which IBM expects to close before year-end, remains subject to SPSS shareholder approval and regulatory review.

IBM characterizes the acquisition as expanding its "Information on Demand" (IOD) software portfolio and business analytics capabilities, including the range of products and services available through the vendors newly minted business Analytics and Optimization Consulting organization and network of Analytics Solutions Centers.

"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," comments Ambuj Goyal, general manager, information management, IBM. "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."

The IBM source notes that industry researcher IDC estimates a global market for business analytics reaching $25 billion this year, constituting a 4 percent increase over 2008. The technology area is a hot one for the insurance industry specifically, according to Matthew Josefowicz, director of Novarica's insurance practice. "Our research shows that business intelligence is a top priority for insurers in 2009 and 2010, and one of the main drivers is to build a foundation for predictive analytics," Josefowicz comments. "While IBM no doubt had a broader perspective in mind, this should certainly give them another strong offering in their portfolio for insurers."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio