On the Scene: SPSS Directions '09

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Many were surprised by IBM’s July 2009 acquisition of predictive analytics company SPSS for $1.2 billion. Soon after the deal officially closed, SPSS—now an IBM company—held its first user conference as a member of the Big Blue family, seeking to spread the gospel about predictive analytics in a much broader business context. 

On the first day of the conference, hard questions for executives sprung up immediately: Will prices increase now that SPSS is owned by IBM? Deepak Advani, the vice president of predictive analytics at IBM Business Analytics & Process Optimization, insisted this is not part of the immediate plans. “My focus is creating an ambidextrous strategy for SPSS,” he said. “For those employees, the focus is on continuity: Do in Q4 [2009] and Q1 [2010] exactly what you would have done before. In the near term, it is really important that we continue reaching out to existing customers with the same level of service as before.”

Doug Dow, senior vice president of corporate development for SPSS, agreed. The smaller customers that have been the core of SPSS’s clientele, he said, will now have the opportunity to add non-SPSS capabilities without having to change vendors. As Nucleus Research pointed out in a note on the acquisition, SPSS customers now have a “one-stop shop” for adopting or expanding an existing deployment of business intelligence or performance management.

Many customers at the conference said they already utilized some offerings from IBM and were excited by the possibilities of integration. Alan Payne, manager of member research and development for Navy Federal Credit Union, said that, in addition to using various offerings from SPSS, the credit union had already been “an IBM shop including Cognos, which the [SPSS] acquisition could provide even better integration with.” 

Payne was also among those expressing hope for broader acceptance of what predictive analytics can deliver for businesses. “It’s finally happening,” he said. “We’re still in the early toddler phase of what predictive analytics can do, but we’re maturing and putting more into practice. We can now start to see the robustness.”

Jimmy Jung, assistant vice president for enrollment management at Baruch College, noted that, in the higher education vertical and particularly in the last two years, he had seen a shift in perspective regarding the power of predictive analytics. “People realize now that you can interact and track communication almost in real time,” he said. “This live data can absolutely help with decision making.”

Advani said that he believes the key question for Big Blue customers—including those using IBM DB2, IBM mainframe server, IBM Cognos, or the company’s extract, transform, and load tools—is how this can all fit into business processes. “Predictive analytics has been missing in the past for them, and they’re really jazzed about this,” Advani said. “Over the last couple of years, the message to our marketplace is that the world is shifting from just automating processes to optimizing. There’s a lot of focus on achieving business outcomes, and predictive analytics and SPSS [are] key to that.”

By eliminating the barriers of size and scale, predictive analytics can be vastly extended within organizations, says Colin Shearer, who was senior vice president of strategic analytics for SPSS. The question remains where—and how far. While an original equipment manufacturer relationship between SPSS and IBM Cognos existed prior to the acquisition—and will continue—Advani remained noncommittal about the integration permutations among the various IBM units, which now include reporting, business intelligence, data warehousing, and business rules. 

This will be one of the most important decisions SPSS and IBM make going forward. “Instead of focusing on which industries or customers we’ll target first, we’re starting by analyzing where IBM and its software group [have] a lot of strength, presence, and traction,” Advani said. “When possibilities are endless, it’s almost like the kid-in-a-candy-store concept. We will have to be very disciplined and thoughtful of where we place our bets.”  

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