IBM buys Coremetrics to boost analytics

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IBM's planned acquisition of Coremetrics, announced June 15, is further evidence that technology companies will continue to add analytics capabilities to their products and services, industry experts told DMNews. The transaction, whose financial terms were not disclosed, is expected to close in the third quarter of this year.

“Some people would say that web analytics as a space has peaked. I don't think that's true,” said Bob Hale, SVP of corporate development at marketing services provider Alterian.

“It's ready for the next phase to be something larger. It needs to be part of a larger ecosystem, so rolling it into a company like IBM makes sense with its advanced services.”

Alex Yoder, president and CEO of Webtrends, an analytics and measurement service provider, added that “it's been demonstrated time and time again that most of the market agrees that analytics are a core part of any kind of business function,” he said.

“There's been an element of confusion on the part of the marketplace about how to apply that practice to the web and other areas.”

IBM noted that companies are looking for ways to optimize marketing processes and get better insights into client demands when it announced the acquisition. The Armonk, NY-based company noted that its studies have shown more than eight in 10 CEOs want to get closer to customers and understand them better.

IBM's Software Group has acquired more than 55 companies since 2003, including pre- dictive analytics firm SPSS in 2009. Bosio said there are no plans for employee downsizings once the transaction is final. Coremetrics' 230 employees are expected to be integrated into the IBM workforce, she said.

Lori Bosio, media relations director at the IBM Software Group, said streamlining IBM's social media analytics process was a key reason for the acquisition.

“The first time a customer interaction is made with any product or brand, it's typically on the web,” she said. “Giving clients real-time access to that data and being able to merge it with internal data is critical.”

John Squire, chief strategy officer at Coremetrics, said the deal “gives us a good opportunity to grow faster and have a larger footprint worldwide.”

“This will bring more interactive technology into the organization,” he said. Elana Anderson, VP of products at marketing software company Unica, said the acquisition demonstrates businesses' interest in acquiring analytics firms, adding that other standalone rivals in the space are also being scouted for possible purchases.

“There are a handful of standalone web analytic players in the market,” she said. “Certainly the 2009 Adobe acquisition of Omniture took out a standalone player. It's not a surprise that both Coremetrics and Webtrends are being eyed as targets for acquisition.”

Anderson added that the buy will help IBM's e-commerce capabilities. “IBM sees web analytics as core to its e-commerce application.”

Adobe agreed to acquire Omniture in part to embed its analytic software in Adobe content creation tools, such as Photoshop, Flash and Acrobat. The deal was valued at $1.8 billion.

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