IBM's Tuesday 'Doubleheader': Still Behind Its Usual Yearly M&A Pace

by Brenon Dal

In a highly unusual move, IBM did the M&A equivalent of a ‘Tuesday twofer,’ buying both big and small on Tuesday. In terms of the high-dollar deal, Big Blue said it will hand over nearly $1.17bn in cash for predictive analytics software vendor SPSS. The purchase of SPSS is the company’s largest transaction since it shelled out $5bn for Cognos in November 2007. In fact, we suspect the $1.17bn paid for SPSS is roughly the same amount that IBM spent on the nine deals it has announced (many of them with prices undisclosed) since picking up Cognos.

On the smaller side, IBM also said yesterday that it has acquired startup Ounce Labs, which makes source code analysis software. Terms weren’t revealed, but we wouldn’t be surprised to learn that the amount IBM paid for Ounce Labs was just 1% of the price it forked over for SPSS. Ounce Labs had raised some $29.5m in venture backing.

As a final thought on Big Blue’s doubleheader Tuesday, we would note that the two purchases double the number of acquisitions that IBM has announced so far this year. The total of four deals in 2009, however, is basically half the number it had announced by this time in any of the previous three years.

Comments

[casey00001:]

Wish IBM would return some revenue to the stockholders in the form of increased dividends, rather than wasting our money this way.

Jul 30 10:05 AM

[Frank Xavier:]

I think IBM needs to stay up-to-date with its software portfolio to be competitive in the long run. From my point of view, Cognos and SPSS are very good additions to IBM's enterprise software portfolio.

Business Intelligence is a strong topic in IT spending and for CIOs and hence the market leader in the BI market, Cognos, was a good pick. And within Business Intelligence, Data Mining and Predictive Analytics are the hottest topic and SPSS is one of the market leaders there. It is second to SAS, which is privately owned by its founder and probably not for sale. Hence SPSS as number two again was a good pick.

By the way, Cognos already used SPSS software within its BI tool portfolio under an OEM license deal. Hence the IBM acquisition of SPSS was not such a surprise for me.

I wonder, what SAP thinks about this. They acquired the BI tool vendor Business Objects last year. And Business Objects also acquired an SPSS OEM license last year. Hence SAP would have been another candidate for an SPSS take-over, but now they are too late.

Jul 30 01:48 PM

[Old Trader:]

casey,

I think your complaint would be better directed at MSFT, rather than IBM. Over the last decade, or so, IBM has done a great job in transforming itself, recognizing early on which way the wind was blowing, imo.


On Jul 30 10:05 AM casey00001 wrote:

> Wish IBM would return some revenue to the stockholders in the form
> of increased dividends, rather than wasting our money this way.

Jul 30 05:27 PM