International Business Machines (
recently announced that it has completed the acquisition of
privately-held business analytics software provider Star
Analytics for an undisclosed amount. The acquisition will expand
IBM's growing analytics product portfolio over the long
Redwood City, Calif-based Star Analytics offers products that
easily extract relevant financial data from big data and
integrates reporting and business intelligence tools both in the
cloud and on-premise. This reduces time consumption, thereby
allowing faster decision making. Moreover, Star Analytics
software helps to effectively address automation headwinds
between hybrid computing environments and different
Apart from being a long-time IBM partner, Star Analytics also
relational database management system ("RDBMS") and
SQL server. Star Analytics cloud products run on major platforms
including Oracle on Demand, Microsoft Azure and Amazon Web
The Star Analytics product portfolio will form a part of IBM's
financial performance management unit under the analytics group.
The latest acquisition complements IBM's earlier business
analytics takeovers of Varicent, Algorithmics, Clarity Systems,
OpenPages and Cognos. IBM expects these acquisitions and ongoing
investments in predictive analytics such as SPSS to expand its
analytics product portfolio.
Business analytics is one of the four key long-term growth
initiatives of IBM, in addition to cloud computing, smarter
planet and growth markets. IBM expects business analytics to grow
to a $20.0 billion business by 2015 and acquisitions are expected
to be a major contributor. IBM acquired 11 companies in 2012 at
an aggregate cost of $3.96 billion.
It is noteworthy that most of these acquired companies offer
analytical products. Reportedly, IBM has spent $16.0 billion on
30 analytics acquisitions over the last five years (2007-2012).
IBM plans to spend approximately $20.0 billion on acquisitions
through 2015, which is expected to boost its top line by
We expect IBM to continue to pursue strategic acquisitions
that can be easily integrated into its current business, thereby
expanding its product portfolio in higher-growth segments, such
as smarter commerce, business analytics and security. The
acquisitions will also help IBM to compete with the likes of
Oracle and Microsoft in the near term.
However, volatile macro-economic environment, continued
weakness in the domestic market and Euro zone, declining
outsourcing signings and increasing competition from other
outsourcing service providers such as
are the major headwinds in the near term.
Currently, IBM has a Zacks Rank #3 (Hold).
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