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What does IBM’s acquisition of SPSS mean for the analytics field?

On Tuesday, IBM announced that it was acquiring SPSS for 1.2B in an all cash deal. Not surprising that one of the big database companies would go after a data mining software company. For many companies, it’s all about the database. IBM’s existing Intelligent Miner package is not widely used, though I’ve heard that it’s powerful. (Never used it myself.)

My question is, what does this mean for the analytics field / to the analytics community?

My guesses:

Microsoft will continue to chart their own course. Not a wise move in my opinion. SQL Server Analysis Services is IMHO, fairly awful and has very few features. Plus, Microsoft has widely known (and academically published) problems with creating accurate statistics routines. (e.g. McCullogh & Wilson, On the accuracy of statistical procedures in Microsoft Excel 2000 and Excel XP, Computational Statistics & Data Analysis 40 (2002) 713 – 721)

Oracle bought Thinking Machines International and their Darwin data mining suite in 1999, and Oracle Data Mining is somewhat widely used and fairly powerful. They might continue to chart their own course as well.

But if Microsoft or Oracle did go after someone, I’m guessing StatSoft would be the target…

Thoughts?

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Hi Joseph,

All the big giant you have named, they do not have market share reaching to double digit in the domain of BI market closely US$ 25 bilion by the year 2010, source IDC,

One of the major reason they do not have an Analytical engine of there own & struggling for techno-commecrcial colloboraton.

In recent past we have experienced acqisition of Business Objects by SAP for a Reporting tool.

If IBM can translate its vision to the reality the power of Analytics from the Back desk to front Desk where it will benefit to miilion and change IBM phlisophy from information on Demand to Intelligent Information on Demand may threat to many of consultant organisation who are in this market of BI.

It is better to cross our finger, wait & watch at this point of time.

Thanks.
Biswajit.
i am interested to know which company SAS will now acquire?
It seems to me that SPSS has a history of annual updates, some of which are so buggy they aren't usable. My hope is that IBM will fix the problem SPSS has had with updates. Updating less often would be fine with me.

On the other hand, IBM has a tradition of charging high prices for work that can usually be done in-house using SAS or SPSS at a fraction of the cost (if an in-house analyst is available and has time). I expect price increases and reduced accessibility from IBM. If those price increases come with higher reliability, they might be worth it.

IBM also has a history of primarily serving the corporate world. I hope they will continue to provide statistical analysis software to the small consultant and the academic world, but I don't expect this. If SPSS doesn't stay available to the small user, then expect market share to move to SAS, StatSoft, or other statistics packages.
First off, I’d say that I have absolutely zero faith in IDC’s numbers on the BI market. They’re just bad. And even if they were good, it wouldn’t give you a very good picture of the market – for instance, Microsoft doesn’t charge extra for SQL Server Analysis Services. Also, it depends greatly on how you define things - if databases that contain OLAP functionality are included in BI, MS, Oracle, and IBM absolutely dominate the market… You are right however that the three big database providers don’t have a big chunk of the data mining market. (Though I’m pretty sure Oracle has a bigger chunk than most people would imagine.)

I do find it funny that you mention SAP. SAP integrates SPSS as their analytics solution, so SAP is now tied to IBM for analytics. On a side note, we use Crystal Reports Developer, and I think it’s stayed fairly stable since SAP bought Business Objects.

I can’t image SAS would acquire anyone, though they’ve got to have plenty of money available to do it with. If they bought StatSoft, it would leave the analytics market with just IBM/SPSS and SAS… Kind of a scary thought.

What I’m really surprised by however if the deafening silence by SPSS users. I guess I should take this as they think SPSS will continue to be available in a similar form for a similar price structure for the foreseeable future. Personally, if I was say, a social science researcher using SPSS, I would be terrified that IBM wouldn’t keep up with new statistical developments in my field, and I’m pretty sure I’d be looking at SAS or Stata. If I was using SPSS’s data mining suite, I’m not sure what I’d be doing. Probably hoping and praying…
If SAP integrates SPSS as their analytics solution, do you think IBM could be looking at SAP as another future aquisition?
This is another case of a company that would be difficult to acquire - SAP has annual revenue of $11B Euros / $16B USD…
My guesses: Oracle will now acquire SAS, and SAP will acquire StatSoft.
Interesting thought that SAP might go after someone. Though they have a good relationship with IBM, I can see how they might not want to be beholden to IBM for their analytics package.

SAS would be a difficult company to acquire. SPSS was bought for four times revenue. If you valued SAS the same way, you’d be looking at $80 billion.
Jim Goodnight, SAS CEO was asked if he would be willing to sell his company and he flat out publicly refused and mentioned it would be more likely for SAS to acquire some names mentioned then other way around.
He's not interested in taking his company public either.
In his words, he does not want some 24 year old, right out of school, Wall Street stock analyst tell him how to run his company.
This is not some questionable article I read. This was coming out of his mouth and I was sitting 20 feet away in the crowd.
He also talked about SAS corporate culture that is indeed very different than others.
While publicly traded companies like SPSS worry about short term gain and bottom line to please the shareholders, SAS puts a huge chunk of profits right back into R&D and think long term.
Their employees are well paid, have a barber to cut their hair, daycare to drop their kids off and even personal counselors for people in need at their workplace at SAS campus in NC. He also believes in every individual having his/her office with walls and a door as opposed to open concept cubicles. He does all of this because he doesn't want his workers to be destracted by outside factors allowing them to do quality job...and they respond.
Every single one of them I asked loves working for SAS. Their Enterprise Miner product is far more popular than others including SPSS Clementine.
IBM bought Cognos and SPSS, but SAS already has a product that combines the tasks of a BI tool like Cognos or Business Objects and statistical analysis software like SPSS. The SAS product I'm talking about is Enterprise Guide. It will take IBM a while to come up with something comparable as they will have their hands full trying to merge IBM, Cognos and SPSS cultures.
It took me a while to understand why SAS has such a cult, grass roots following, many users volunteering, helping to organize SAS get toghethers all over the world and writing a sea of white papers (try googling SUGI and you'll see what I mean).

It's because SAS is no 1 commercially available analytical software and its leaders had a long term vision and that is uncompromising quality and development while making sure there is demand for it on the market.

R may have a lot of cool, cutting edge procedures and similar sense of grassroots community.
However, R is made by an army of anonymous people all over the world and there is no way someone can be held accountable for the procedures used and potential for bugs and mistakes, not to mention lack of formal help support. That will never fly in the corporate world.

That's why it really isn't fair t compare R and SAS.

I have been an SPSS user for a while. I'm glad I got my feet wet in SAS :)
I can't agree with the view taken here on R. I am a SAS user for all my professional work for last several years and to be honest, I personally don't want SAS to be outcompeted hands down by some other application - it's kind of a releationship-like feeling. However, as an analytics professional and working with several clients from multiple industries (including BFSI, retail and cpg, aviation, etc.) I have noticed an increasing interest in R. For most it started as some curious exploration which resulted into embracing it as a trusted alternative for their analytic software requirements. There's no doubt that R's staistical capabilities are always ahead of possibly any other commercial software. Also, R being available for free brings it as a rather compelling choice for many - even in corporate world.
Dear Joseph,

I agree with you . I think core competencies always matter.

rgds
parag
Dear All,
I have been following the discussion for some days now. Honestly I was just contemplating to commit some funds for the SAS training in Malaysia, but I was taken aback by the cost. But on a second thought, with the trends in the industry, I dont want to miss the boat. I may afterwards join the bandwagon and dorn the SAS toga.

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