Following 2007's flurry of acquisitions of business intelligence specialists by enterprise software powers like SAP, Oracle and IBM, Gartner predicted the <strong>BI</strong> <strong>market would enter a flux phase</strong>, with growth slowing for the next five years or so. Gartner mentioned that vendors would seek to differentiate their solutions with visualization, predictive modeling and more advanced analytics.
Bingo. That seems to be the case with IBM, which just announced its plans to acquire SPSS. Big Blue's purchase will help raise the profile of predictive analytics and data mining in the enterprise, opines BeyeNetwork blogger James Taylor. Indeed, IBM's move will trigger similar acquisitions of analytics specialists, according to a Forrester Research report.
Forrester says SAP already intends to buy SAF AG, a German provider of analytics software geared toward retailers and wholesalers, and may submit a counter bid for SPSS. Other potential acquisition targets include KXEN, Angoss and SAS Institute, notes Forrester.
SAS seemingly prefers to go it solo for now, writes InformationWeek blogger Mary Hayes Weier. The company is a solid No 1 in advanced analytics, commanding a third of the $1.52 billion market in 2008, according to IDC. SPSS takes the No. 2 slot with 14 percent of the market. After these two leaders, the market gets highly fragmented; No. 3 Microsoft has less than 2 percent of the share. Yet simply buying technology may not help software companies grab market share. SAS sells vertical products such as fraud detection and credit risk to banks, price optimization to retailers and churn analysis to telcos. Weier quotes SAS Chief Marketing Officer Jim Davis:
People are not interested in buying technology as much as they are in buying a solution.
IBM has more up its sleeve. BeyeNetwork's Taylor says Big Blue could put together "a complete decision management platform," combining support decision management, process management, event management and information management. He predicts IBM will incorporate some of the SPSS capabilities into its new Smart Analytics Systems appliance. SPSS will also add value to its new Business Analytics and Optimization practice, which Big Blue is ramping up with analytics centers across the globe.
The practice could be a clear win for IBM, since "high-end analytic solutions still require a significant amount of domain expertise and technical integration as well as multiple products," writes Taylor. That's IBM sweet spot, getting into a market before commoditization sets in.
IBM is seemingly leaving few analytics stones unturned. Earlier this year IBM bought software assets from Exeros that will uncover hidden relationships in databases. It introduced new middleware called WebSphere Sensor Events, which can connect RFID data to business process and analytics systems, such as its own Cognos and Smart Analytics System platforms, or third-party applications such as CRM or ERP systems. It also launched the Text Analytics Group, which creates software templates to help analyze text in e-mails, call center notes, videos, chat transcripts and Web pages.