Adam Gartenberg's Blog

Business Analytics and Optimization, IBM and Social Marketing

IBM bolsters predictive analytics capabilities through acquisition of SPSS

One idea central to the concept of New Intelligence is the importance of shifting from reactive responses to predictive and proactive action.  A key element of this shift is the application of analytics to understand how what has happened in the past (and what is happening in real-time right now) can provide greater clarity into what may happen in the future.

While IBM has been helping companies apply analytics through a combination of software, industry solutions, and advanced models from our extensive teams of researchers and mathematicians, it looks like we will be adding a host of new capabilities through the acquisition announced today of analytics software provider SPSS.

While I was not involved in the acquisition (and so am still coming up to speed myself on the full implications), Information Management General Manager Ambuj Goyal explaind the rationale behind the acquisition in a statement today:

"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."

The press release also highlights some examples of how businesses are taking advantage of this technology:
  • The Richmond, VA police department provided the results of this kind of predictive analysis to detectives and saw a 20-30 percent decrease in violent crime and homicides in a 12-month period. This technology has also been used in political campaigns to zero in on likely voters to determine what campaign messages have the greatest impact on undecided voters.
  • With this type of technology, Internet merchants now know exactly which products customers are browsing and buying -- in real-time.... With insight into future buying trends, retailers can address customer needs in a highly personalized manner. If a customer purchases a specific seasonal product, the retailers can instantly give the online shopper options on additional items that he or she may also like to purchase as seasons change.

The deal is expected to close in the 2nd half of 2009, pending approval by SPSS shareholders and regulatory agencies.

You can read more about the acquisition below, and I will update this post with additional news as it becomes available during the day.