July 28, 2009

Initial reactions to IBM acquiring SPSS

IBM is acquiring SPSS.  My initial thoughts (questions by Eric Lai of Computerworld) include:

1) good buy for IBM? why or why not?

Yes. The integration of predictive analytics with other analytic or operational technologies is still ahead of us, so there was a lot of value to be gained from SPSS beyond what it had standalone.  (That said, I haven’t actually looked at the numbers, so I have no comment on the price.)

By the way, SPSS coined the phrase “predictive analytics”, with the rest of the industry then coming around to use it. As with all successful marketing phrases, it’s somewhat misleading, in that it’s not wholly focused on prediction.

2) how does it position IBM vs. competitors?

IBM’s ownership immediately makes SPSS a stronger competitor to SAS. Any advantage to the rest of IBM depends on the integration roadmap and execution.

3) How does this particularly affect SAP and SAS and Oracle, IBM’s closest competitors by revenue according to IDC’s figures?

If one of Oracle or SAP had bought SPSS, it would have given them a competitive advantage against the other, in the integration of predictive analytics with packaged operational apps. That’s a missed opportunity for each.

One notable point is that SPSS is more SQL-oriented than SAS. Thus, SPSS has gotten performance benefits from Oracle’s in-database data mining technology that SAS apparently hasn’t.

IBM’s done a good job of keeping its acquired products working well with Oracle and other competitive DBMS in the past, and SPSS will surely be no exception.

Obviously, if IBM does a good job of Cognos/SPSS integration, that’s bad for competitors, starting with Oracle and SAP/Business Objects. So far business intelligence/predictive analytics integration has been pretty minor, because nobody’s figured out how to do it right, but some day that will change. Hmm — I feel another “Future of … ” post coming on.

4) Do you predict further M&A?

Always. :)

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Comments

8 Responses to “Initial reactions to IBM acquiring SPSS”

  1. Jerome Pineau on July 28th, 2009 2:42 pm

    @Curt: “I feel another “Future of … ” post coming on.”

    I started the thread on my blog :)

    Thanks for taking that task up I think it’s an area that’s been perhaps underserved for a while and I look forward to your insight on that issue!

  2. Bence Arató on July 28th, 2009 4:41 pm

    Kurt, I’m somewhat surprised at your point of SPSS being more SQL-oriented than SAS.

    I feel that actually SAS has the edge now in the
    area of in-database mining with its Teradata integration and shared development. SPSS could use and does benefit from the Oracle Data Mining option, but this is a combination which rarely used.

  3. Curt Monash on July 28th, 2009 4:51 pm

    My sense is that SPSS just naturally relies on the database manager to get it data, while SAS prefers one to do extracts into its own proprietary data format first.

    Am I wrong in that?

    CAM

  4. Guy Bayes on July 28th, 2009 5:04 pm

    SAS can be pretty sophisticated in the way it issues SQL selects the RDBMS, has a sort of pushdown optimization capability similar to informatica. However there is no doubt that SAS has a tendency to pull data down into work areas to sort and process it, that is certainly true.

    Whether SPSS has that same tendency, I do not know but I would not be surprised if it does. Any external engine is going to have to stream the data from the RDBMS through the engine somehow, and once it is streaming, it will find advantage in locally cacheing. Even Informatica does this.

    SAS also has a feature where entire enterprise miner (EM) graphs can be exported and recompiled as UDF’s, run natively inside Teradata. At this point, all execution should happen inside Teradata. However, to get this to work, you have to be using EM against only teradata sources.

  5. Shawn Fox on July 29th, 2009 12:09 pm

    I have no experience with SPSS but I constantly see SAS trying to pull a full copies of huge tables out of the database to perform some operation on it.

    Maybe the SAS/Teradata integration reduces that quite a bit on Teradata, but with other databases I have a lot of doubt as to how good of a job SAS does at pushing analysis into the database instead of pulling all the data out to run the analysis on the SAS server itself.

  6. RC on July 29th, 2009 2:35 pm

    Oracle has already bought so many companies, it can’t go on and on.

  7. It’s On: IBM Acquires SPSS « Market Strategies for IT Suppliers on August 2nd, 2009 10:05 pm

    […] and integrate customized functionality with R and Python in any module.” Curt Monash has pointed out that SPSS is much more SQL-friendly than SAS. Why does that matter? In the DBMS space, a key current […]

  8. Historical notes on analytics — terminology | Software Memories on January 17th, 2012 3:02 am

    […] Anything in the predictive analytics area (but see the first point in a 2009 SPSS post). […]

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