Uncovering the Next Chapter in Predictive Analytics

LAS VEGAS — Predictive analytics, at a very high level, attempts to tie together disparate data accrued from past experiences to better inform future business decisions. Jack Noonan, chairman and chief executive officer of SPSS, put this principle into action here this morning at SPSS Directions '09, taking attendees on a trip down memory lane to put into perspective the new chapter his company entered after being acquired by IBM in July. 

Noting its start in 1968 when Norman H. Nie, C. Hadlai Hull, and Dale H. Bent developed a software system based on the idea of using statistics to turn raw data into information essential to decision-making, its growth into a corporation in the mid 1970s, transitioning into an enterprise from 1997-2002 through acquisition, and predictive analytics "coming to age" as a market as all major transitions, Noonan unequivocally believes its combination with IBM is another one of these.

"I believe what we have is a marriage that is unique at a unique point in time," Noonan said. "I don't think if we had put SPSS on the market that we could have picked a better corporation to come knocking at our door. Talk about taking it up a level -- SPSS talks about how to improve various business processes, and IBM talks about improving companies, government, and the planet. We believe predictive analytics is the lynchpin to that success moving forward."

Noonan segued into a panel discussion -- including himself, Rob Ashe, general manager of IBM's business intelligence and performance analytics unit, and Deepak Advani, IBM's vice president of predictive analytics -- by stressing this we are in the midst of "the most exciting time in marketplace in the last 40 years SPSS has been in existence, and the last 100 years for IBM."

The panel discussion among the three delved into IBM's acquisition of SPSS -- giving customers in the crowd a chance to find out why IBM was chosen, how the integration is going, and any pricing or strategy changes current customers could expect.

Ashe explained that in IBM's ambitious push in attempting to help perpetuate a smarter planet, a key tenet in that aim is analytical resources. "New intelligence is [integral] in IBM's emerging strategy," he said. "The last 20 years was about automating businesses, and the next 20 will be about optimizing them. SPSS is a natural extension of our strategy, and is a strategic jewel in our portfolio around analytics."

While there is a large push in analytics, Advani is not naïve to the potential for other competitors bolstering its offerings in this area. He explained the key differentiation IBM will have -- with the involvement of SPSS and other analytics-minded companies the company has acquired recently -- is its breadth and depth to deliver what customers want.

"We present the most comprehensive portfolio and strategy when it comes to optimizing businesses," he stressed. "Data will be all over, and you can't just think of it all within the walls of an enterprise. The things we can do with surveys, text and data analysis ... presents the most complete picture to customers. I don't see another company with all the pieces IBM has."

SPSS customers in the crowd, though, wanted to know just how they will fit into this high-level strategy IBM and SPSS have. One customer asked if they could expect to pay higher prices now that SPSS has been acquired by a large entity like IBM. Advani quickly assured that short-term profit gains is not part of the plan. "Raising prices is not part of our strategy at all," he said. "We want to make predictive analytics pervasive, and as such we're not thinking of how to maximize profits by increasing prices."

That will mean maintaining relationships and deepening them with current SPSS client base. "We must preserve relationships SPSS has built for decades with customers," Advani added. "A lot of existing customers can look forward to more focus in this space -- not just modeler, collaboration, deployment, statistics, and data collection. We're looking at it more holistically."

Part of that holistic outlook involves embedding predictive analytics software into business processes. Noonan believes that we are on the precipice of realizing great benefits in that area. "One thingt;../tiny_mce/themes/advanced/langs/en.js" type="text/javascript"> // -->I'm more excited about isn't [regarding] SPSS technology and where it can go, but rather IBM's ability to take this to market and support each and every one of you independently in your journey to improve effectiveness in your operations," he stressed to customers. "IBM devoted 4,000 service personnel to this activity before acquiring SPSS. That's four times the size of our entire company -- and there is a great opportunity over the next decade to take information we have in front of us and make customers a lot of money."

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