IBM Gets Serious About Business Analytics

IBM’s (NYSE:IBM) move into business analytics got a big push as the company came to an acquisition agreement with Varicent Software on Friday. Varicent makes software that analyzes compensation and sales performance for businesses.

The company already services more than 180 banks, insurance companies, and retailers. Varicent’s software will be combined with IBM’s other products and be delivered through cloud computing or provided on site.

IBM said there was an opportunity for more businesses to apply advanced analytics. “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 IBM’s general manager of business analytics, Les Rechan.

IBM has been trying to move away from crowded fields into high-margin businesses. It has been aggressive in acquiring companies in the business analytics field, including buying Algorithmics, Clarity Systems, and Open Pages earlier, and has been spending on its own research and development. Revenue from the company’s business-analytics segment grew 16 percent last year and IBM said it expected the figure to rise to $16 billion by 2015. IBM stock is up 11 percent so far this year.

The Varicent deal is expected to close in the second quarter. Terms were not disclosed.