SPSS Acquisition Announcement - FAQ
Purpose
The purpose of this document is to address particular questions and provide additional insight about SPSS’ definitive agreement to be acquired by IBM. To view the full press release, go to: http://www.ibm.com/press/us/en/pressrelease/27936.wss
Q. What was announced today?
On July 28, 2009, IBM announced that it has signed an agreement to acquire SPSS Inc.
Q. What are the financial details of this acquisition?
This is a cash transaction at a price of approximately $1.2 billion USD or $50 per share.
Q. When will this transaction be finalized?
This transaction will be finalized following SPSS shareholder approval, regulatory reviews, and completion of customary closing conditions, which should occur later this year.
Q. How will SPSS customers benefit?
SPSS customers will immediately benefit from the combined technologies and skills of both companies, giving them an open standards-based information infrastructure with analytics expertise and global resources to help optimize their businesses and maximize enterprise performance. They will also benefit from the increased investment, global reach, industry expertise and support available from IBM. IBM remains committed to open standards and will continue to support and enhance use of SPSS products with heterogeneous information systems.
Q. What does this mean for SPSS business partners?
Opportunity. SPSS has an extensive distributor network for its products. IBM plans to continue the relationships with the skilled SPSS distributors that have enabled the success and broad adoption of the SPSS portfolio around the world. It will also offer these Business Partners the ability to join the broader IBM partner community and programs with access to the vast portfolio of IBM offerings, should they wish to take advantage of these programs.
Q. Why is SPSS being acquired by IBM?
Today’s business environment is fundamentally different – new economics, globalization, massive interconnections and increased risk, coupled with an explosion of information. Organizations need to do more than just sense and respond to current business conditions; they must be able to predict those conditions and then act. Predictive Analytics is the critical enabling technology needed to achieve these efficiencies because it detects and analyzes patterns in historical and current transaction data as well as attitudinal survey data to help organizations predict potential future outcomes and determine the best actions to take.
IBM’s Smarter Planet initiative is about enabling businesses, organizations, and governments to take the steps needed not only to survive but thrive in the current economic climate and ensure future success through optimization, while also making our world a better place to live. To really make a difference for our clients and for the world, systems must be sustainable and to be sustainable, they must be smarter.
The acquisition of SPSS is transformational for IBM, enabling them to provide the predictive ‘brains’ for intelligent systems through predictive analytics and mathematical models. Together we will provide solutions that enable a smarter planet.
Q. What is predictive analytics software (PASW) and what value does it provide?
Predictive analytics software captures and analyzes data about people’s attributes, attitudes and behaviors to gain a full understanding of anticipated future behaviors, applying these insights into business processes to improve outcomes.
The key is to help our clients create greater value from data assets in all areas for unique, predictive insights in real-time that will enable them to predict future and make smarter decisions for improved business outcomes. This technology enables clients to create and apply data mining models to uncover hidden patterns in data, visualize data patterns to gain instant insight and quickly apply that insight to predict the outcomes of interactions even before they occur, while capturing essential information about people’s attitudes and opinions. It provides insights into complex questions with the ability to predict potential future outcomes.
The ability to predict future trends, spot shifts in consumer patterns or behaviors even before they have happened can give businesses a competitive advantage in today's economy. Predictive analytics is being used by businesses to identify these trends and patters to improve decision making that impact future business outcomes.
Questions SPSS helps organizations answer:
– How can a financial institution target its products and marketing strategies to reach interested, credit-qualified customers, building efficiency into the application process and increasing profitability?
– How can a credit provider tailor car financing options that meet customers’ budget needs, increase the efficiency of credit risk analysis, reduce loan defaults and retain desirable customers?
– Which factors (on-time arrivals, food and beverage menus, in-flight service, baggage handling, price, number of destinations, frequency of departures) are likely to drive customers to choose a particular airline carrier?
SPSS’ predictive capabilities can also be coupled with those of another recent IBM acquisition, ILOG, which offers business rules and advanced mathematical models that are highly complementary for optimizing business decisions.
Q. What is Business Analytics and Optimization (BAO)?
Bringing together sophisticated analytics from IBM Research with market-leading software platforms, deep industry insight and business consulting expertise, IBM’s Business Analytics and Optimization (BAO) service line helps clients gain greater precision and predictability from every business decision they make, through the following core competency areas:
· BAO Strategy: Helps clients realize their business objectives faster, with less risk and at a lower cost. Predictive analytics help improve how information is recognized and should be acted upon across the enterprise - with actions spanning policy, analytics, business process, organization, applications and data.
· Business Intelligence and Performance Management: Empowers decision making and improved business performance through the timely access, analysis and reporting of actionable, accurate, and personalized information. Predictive analytics will help further improve insight and ultimately decision-making and performance across the enterprise.
· Advanced Analytics and Optimization: Enhances organizational performance by applying advanced mathematical modeling, deep computing, simulation, predictive analytics and optimization techniques to improve operational efficiency and address specific business process areas.
· Enterprise Information Management: Helps clients improve business processes and total business performance and make intelligent decisions through data integration between disparate systems and increased data consistency throughout the enterprise.
· Enterprise Content Management: Contains the services, technologies and processes used to capture, manage, store, preserve and deliver unstructured content. Predictive analytics across unstructured content enrich the predictive insights and decision-making across the enterprise.
Q. IBM claims to already have BAO offerings. Is there product overlap with SPSS?
For decades, IBM has been continually enhancing the business intelligence capabilities it provides to customers. Today, the company is moving to help customers solve new business challenges and meet the demand for more sophisticated, real-time uses of information. IBM has long provided the underlying information infrastructure that supports business intelligence and performance management solutions. This includes databases and data warehouses to manage data, information integration and master data management to establish accurate, trusted information, and various analytic capabilities for extracting knowledge from unstructured information, mining data to identify patterns and trends, and multi-dimensional analysis.
IBM’s recent acquisition of Cognos delivers a broad range of BI and performance management capabilities that enable decision makers to gain valuable insights for better, faster decision making. These capabilities include reporting, analysis, scorecarding, dashboarding and planning.
Meanwhile, SPSS has developed predictive analytics technology, which enables applications and business users to discover forward-looking actionable information and improve the underlying business processes. SPSS offerings have very little overlap with IBM products and provide the greatest value of any predictive analytic solutions in the market. As a result, SPSS will extend IBM’s ability to deliver significant added value to its customers, partners and shareholders.
Q. How will SPSS be integrated into IBM?
SPSS will become part of the Information Management division within the Software Group business unit, led by Ambuj Goyal, General Manager, IBM Information Management. IBM’s plan is to drive continued innovation across SPSS’ predictive analytics portfolio, and to leverage its strengths across many aspects of the broader IBM portfolio.
Safe Harbor Statement
In addition to historical information, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the Company’s expectations, beliefs, intentions or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes,” “estimates” or similar language. All forward-looking statements included in this document are based on information available to the Company on the date hereof. The Company cautions investors that its business and financial performance and the matters described in these forward-looking statements are subject to substantial risks and uncertainties. Because of these risks and uncertainties, some of which may not be currently ascertainable and many of which are beyond the Company’s control, actual results could differ materially from those expressed in or implied by the forward-looking statements. The potential risks and uncertainties that could cause results to differ materially include, but are not limited to: the Company’s ability to predict revenue, the Company’s ability to respond to rapid technological changes, a potential loss of relationships with third parties from whom the Company licenses certain software, fluctuations in currency exchange rates, the impact of new accounting pronouncements, increased competition and risks associated with product performance, market acceptance of new products; the ability of the parties to consummate this transaction, the conditions to the completion of this transaction, including the receipt of shareholder approval, the regulatory approvals required for this transaction may not be obtained on the terms expected or on the anticipated schedule.. A detailed discussion of other risk factors that affect the Company’s business is contained in the Company’s Annual Reports on Form 10-K, particularly under the heading “Risk Factors.” The Company does not intend to update these forward-looking statements to reflect actual future events.