This week’s big news was IBM’s SPSS acquisition. We’ve been assured by SAP that it won’t affect its partnership with SPSS. SAP BusinessObjects sells predictive analytics through an OEM agreement for the SPSS PASW Modeler.
“IBM’s a great partner,” SAP exec Bill McDermott said in an interview. “There’s no reason we wouldn’t continue to work with SPSS in those areas.”
Plus, in a statement released after the SPSS acquisition, SAP said it sells a number of predictive and statistical analytic tools, including Analysis Process Designer integrated in SAP Business Warehouse and CRM applications. It also pointed to its recent acquisition of SAF AG, which is helping retail customers improve forecasting and replenishment.
“I think SAP has the lead,” McDermott said. “Others are acquiring to play catch-up.”
But analysts like Forrester Research’s James Kobielus think that for SAP’s analytics stack to be “primo,” like IBM’s, SAP still has to acquire or develop its own predictive analytics software. Information Builders, MicroStrategy and even Microsoft will likely be looking to do the same, according to an article by my colleague Jeff Kelly on SearchDataManagement.com.
The possible targets include KXEN, Angoss and ThinkAnalytics, according to Kobielus. InforSense could also be on this list, according to Ovum Research analysts Madan Sheina and Tony Baer. Motley Fool also mentioned Fair Isaac as a possible buy.
I spoke with McDermott yesterday after SAP’s second quarter earnings report. He wouldn’t bite when asked where SAP would look to bolster functionality, other than to say that most of its development would continue to happen organically. But, he said, “if there are areas where we can be better,” SAP will pursue them through “thoughtful acquisition,” or partnerships.
Adoption of predictive analytics isn’t mainstream, analysts say, because people haven’t completely grasped what it can do. AMR’s John Hagerty, in talking about IBM’s SPSS acquisition, told SearchDataManagement.com:
“I think predictive analytics is a specialty right now that has some people all hot and bothered, but a lot of people don’t really understand it. People have to be shown what predictive analytics can do before they can really get their arms around it.”
But customers are uncovering the benefits. Last summer, I interviewed Organic Valley, which is using SAP’s predictive analytics software to stay competitive with rival Silk, among others, in the organic foods market. Organic Valley has a group that monitors demand and looks at sales, promotional planning and discounting. But the visual predicative analytics tools offered through SAP BusinessObjects will make the group’s work much easier and help to catch things that may not be apparent in typical spreadsheets.
“It will tell us how much [to make], where to make [it] and when,” said IT director George Neill of predictive analysis. “Hopefully, again, it’ll help us see things that we may not be seeing.”
Encouraging mainstream use of predictive analytics, such that Organic Valley is pursuing, is one of IBM’s goals. As more vendors strive for mainstream analytics capabilities, is further consolidation in the market a foregone conclusion? Is your company looking at predictive analytics?