UPDATE: IBM Buys Varicent Software To Boost Business Analytics
April 13 2012 - 11:02AM
Dow Jones News
International Business Machines Corp. (IBM) agreed to acquire
Varicent Software Inc. as the computing giant continues its push
into business analytics and other high-margin businesses.
Terms of the deal, which is expected to close in the second
quarter, weren't disclosed.
Varicent, a private company founded in 2003, provides software
that analyzes compensation and sales performance. Its clients
include more than 180 banks, insurance companies and retailers,
which use the software to better determine compensation, facilitate
territory assignments and manage quotas.
The deal comes amid IBM's push to expand into complex,
high-margin areas such as the business-analytics business, which
mines data for insight, as it edges away from crowded fields where
price competition can be steep.
Revenue from IBM's business-analytics segment grew 16% in 2011,
and the company has expanded aggressively in the segment through
research and development and its acquisitions of Algorithmics,
Clarity Systems and Open Pages, among others.
IBM has said it expects revenue from its business-analytics
segment to reach $16 billion by 2015, as its software businesses
account for a growing portion of the bottom line.
Varicent's software will be combined with IBM's other offerings
delivered through cloud computing or on site. IBM said it sees an
opportunity for more businesses to apply advanced analytics to
front-line operations, including sales, customer service and
marketing.
"For the thousands of sales organizations still relying on silos
of data, spreadsheets and e-mail to manage sales, there is an
enormous opportunity to apply analytics to this vital area of
business and uncover new, untapped growth opportunities," said Les
Rechan, general manager of business analytics at IBM.
All of Varicent's employees are expected to join IBM's software
group.
Shares were down $1.76 to $203.56 in recent trading. The stock
is up 11% so far this year.
-By Kristin Jones, Dow Jones Newswires; 212-416-2208;
kristin.jones@dowjones.com
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