Deals

IBM buys analytics software firm SPSS for $1.2 billion

ibmIBM is buying analytics software firm SPSS for $1.2 billion in cash as the recession-inspired tech consolidation wave continues.

The companies said the deal would strengthen IBM’s focus on information analytics, where the firms say they have complementary technologies and market positions. SPSS focuses on a category dubbed predictive analytics as a tool for managing companies and making smarter decisions.

IBM will pay $50 a share, a 42 percent premium above Monday’s closing stock price for SPSS. The deal is subject to regulatory approval and is expected to close in the second half.

So why is SPSS so valuable to IBM? Since it de-emphasized hardware, Big Blue has been focused on software and services. Anything that makes its consulting services seem worth the price can help. When IBM goes into clients, it can say it can help them make decisions in a much more analytical way.

Rivals such as SAP and Oracle have done their own analytics acquisitions. So the sales pitch for services contracts can shift from pure data mining to a services-based approach where the big consulting company can interact in a much more intimate way with the customer, IBM said.

In other news, IBM also agreed to buy Ounce Labs, a provider of enterprise source code security testing. Terms of that deal were not disclosed. Waltham, Mass.-based Ounce Labs will be integrated with IBM’s software division. IBM said it was introduced to Ounce Labs through Greylock Partners, one of the 150 venture capital firms that IBM Venture Capital Group partners with.

Since 1995, IBM said it has acquired 75 companies, with a third of them backed by its own venture capital group. Most are in the analytics, collaboration and security markets.