Watch CBSN Live

IBM's Secret Upside for SPSS Acquisition Is Smart Infrastructure

My colleague Michael Hickins was right when he said that IBM's acquisition of SPSS helped it get its hands on a rapidly growing market. But the real upside is not in depriving SAP of an area of business intelligence that it might have been smart in wanting. The big win is that IBM gets to integrate what SPSS can do into what Big Blue knows best: infrastructure. In fact, you might say that IBM is creating a new category, smart infrastructure.

The company is clear on virtually every occasion that it's not simply in the apps business. When I spoke with Paul Bloom, the company's CTO for telecommunications research, he emphasized that IBM largely wants to leave applications to third parties. But the same is true in other areas of the business. IBM isn't planning to go head to head with SAP. Why should it? There's too much money in selling consulting services around installations.

Where the SPSS acquisition makes sense is when you remember that both it and competitor SAS Institute offer the fullest statistical suites you can find and are really in the business of helping people make predictions based on large amounts of data. Whether you're trying to increase the amount of green widgets you can sell to customers in Sri Lanka, reduce credit card fraud for an e-commerce ventures, reduce claims in insurance, increase yield in manufacturing, or increase efficient routing of traffic in a network, statistical prediction becomes a fundamental ability.

By acquiring SPSS, IBM can put it and its consulting arm in the middle of virtually any type of data flow, whether network traffic or commercial transaction. Here are just some of the industries that IBM gets a new hook into:

  • healthcare
  • retail
  • telecommunications
  • manufacturing
  • transportation
  • financial services
  • insurance
SPSS and SAS have been the two big players in this area that crosses virtually every vertical industry segment you can think of, and IBM just laid claim to one of them. Combine that with IBM's other strengths and capabilities, and it's another example of the strategic intelligence driving the company and a record of financial success that is embarrassing competitors.

Image via stock.xchng user svilen001, site standard license.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.