Cloud Analytics Now Part Of The Cloud Buzz

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 |  Includes: IBM, ORCL, SAP
by: Dana Blankenhorn

Cloud analytics is what happens when you analyze big data to find important patterns.

It's made possible by the economics of the cloud. Virtualized operating systems bring all sources of corporate data to the party. Distributed computing techniques let you run huge jobs all at once, without dedicating specific resources. This means you get value from huge data stores like web traffic patterns.

IBM (NYSE:IBM) has been pushing this buzzword for some time, partly because it has been investing in it through acquisitions like DemandTec and Emptoris. The idea is to expand what began as a way to look at e-commerce into a way to look at all the operations and demand data a big company may generate.

The hope is, as it has been for decades now, to make big companies as nimble as smaller ones, by turning data into actionable intelligence for top management. This is how IBM has made its money since the company was formed nearly 100 years ago.

Analyzing the social, mobile, location and transaction-based data big companies collect, and turning that into action, is a game a lot of people can play, of course, even start-ups. What IBM hopes to do in 2012 is get beyond online industries into the data stores of healthcare, pharmaceuticals, anywhere the collection and analysis of “big data” can create a bulwark against lower-cost competitors.

This is why SAP (NYSE:SAP) bought SuccessFactors and launched a venture with NetBase to analyze its huge data store. It may also be why CEOs did not sign on their Oracle (NYSE:ORCL) dotted lines as the company had anticipated.

Right now, cloud analytics is seen by investors as a way to look at potential merger targets. IBM's goal is to pivot from this into analytics as a differentiator of cloud offerings, a way to separate itself from the enterprise computing pack, and gain some serious market share.

So if you're wondering why IBM stock is close to its 52-week high, while Oracle ORCL is close to its 52-week low and SAP is sitting right between those two levels, that's the reason. Cloud Analytics.

Disclosure: I am long IBM.