Analytics is still our middle name

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Big news in our industry this morning: IBM plans to buy analytics software vendor SPSS for $1.2 billion.

In one sense, I'm sad to see SPSS disappearing into the large IBM stack. Besides SAS, SPSS was one of the last independent analytic software companies. A colleague says, “It’s the end of the analytics cold war.”

I've been saying all along that analytics is required for success. Yes, data integration, data quality, and query & reporting are important too but, as W. Edwards Deming says, “The object of taking data is to provide a basis for action.” If you collect data with a purpose (and even if you opportunistically collect data with no specific purpose), you need analytics to use that data to make the best decisions, take the best actions and foresee the best opportunities. Analytics is what helps derive the most value from data and what allows continuous learning and improvement

SAS has always been focused on helping customers extract truths from data with analytics -- analysis is our middle name. Others are realizing the value of analytics, as reflected in this acquisition and in the interest around R and other analytical capabilities.

Why do analytics matter now more than ever? The growing volumes of data — both structured and unstructured — and the business world's growing complexity and pace of change require analytics. Companies are under enormous stress. They're faced with surviving the recession, preparing for an eventual recovery, competing globally… analytics is relevant everywhere.

Beyond providing validation for the analytics marketplace, what else does this acquisition mean? What do we think it says about the two companies involved? To be honest, it's not too much of a surprise. SPSS has been on the market for years. They've been unable to raise funds for innovation, and their growth has been stagnant. Unlike SAS, they have not provided the extensibility many require to meet evolving needs.

IBM bought SPSS to fill a gap and to continue its strategy of buying the individual bits for a framework that lets them compete better with Oracle, SAP and others. IBM is primarily a hardware and services provider with a small fraction of their overall revenue coming from its software group.

What about joint SAS, IBM customers? How does the acquisition affect SAS' partnership with IBM? Our partnership with IBM is sponsored within their hardware group, and this new IBM acquisition is being handled through their software group. The collaboration we have with IBM Global Services and the Hardware Group will continue—and this is in the best interest of customers.

While IBM spends time integrating SPSS into its software stack, SAS will continue to innovate. We'll maintain focus on providing value to our customers, evolving with them to meet their changing needs. We'll keep listening to customers and keep coming up with new ways to solve their business problems. We are free to partner, collaborate and innovate with any partner to help deliver the analytics infrastructure needed regardless of environment, industry, level of expertise or application area. SAS will keep investing generously in R&D as we have always done and we'll continue to provide customers with many options.

Overall, this acquisition further validates that there's a difference between plain old BI and business analytics. The ongoing differentiation in our marketplace will come from analytics. And last year, who led the marketplace in analytics? Companies chose SAS Analytics more often than the next most popular 16 analytics suppliers COMBINED (including SPSS). That's according to IDC's June 2009 Worldwide Business Intelligence Tools 2008 Vendor Shares report.

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Anne Milley

Sr Director, Analytic Strategy, JMP

Anne oversees analytic strategy in JMP Product Marketing. She is a contributing faculty member for the International Institute of Analytics. She enjoys organic gardening and spending time with her family.

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