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September 1, 2011

10

Gold Rush in Business Analytics

By Larry Walsh

At the dawn of the Internet era, it was all about the network. When we moved to the cloud, it became about the application. But underlying these platforms and technology trends has always been the common element: data. And there’s a gold rush among technology companies on who will have the best ability to filter, analyze and provide actionable reporting on refined data.

IBM has been moving deeper in data analytics over the last five years, with its biggest move being the $5 billion acquisition of Cognos. CEO Sam Palmisano said Big Blue would spend $20 billion on acquisitions by 2016, and IBM will generate more than $16 billion in business analytics and intelligence revenue by 2015.

IBM opened its wallet again this week to buy two budding business intelligence vendors, i2 and Algorithmics. The two companies are more than just expanding market share, but also capabilities and entering new business intelligence service segments.

i2 is an interesting U.K. company that provides police forces and military units around the world with the ability to filter through vast amounts of data and distill down to actionable intelligence. i2 is more than software, but more like a weapons system against organized crime and terrorism. Given the state of security in various parts of the world and the limited resources to counter, having real intelligences based on objective data will be come increasingly critical.

Algorithmics, a supplier of risk analytics software, addresses a different kind of threat – economic disruptions. Algorithmics analyses the impact of weather systems, natural disasters, shifting economic conditions and such to determine the impact on supply chains. Its value proposition is more than just analysis, but advance warning and forecast of the impact of economic disruptions. With that intelligence, businesses can develop contingency plans to sure business continuity.

These moves by IBM follow rival’s Hewlett-Packard’s announced intentions to transform itself into a software company. Two weeks ago, HP announced its acquisition of U.K.-based Autonomy, a software company specializing in optimized enterprise search of vast amounts of unstructured data. HP has bought other software companies in the past, but none with the depth (or the expense) of Autonomy.

Outside of these two behemoths, Microsoft is making more noise in business intelligence. It’s engaging with its software development partners to create more applications on its Dynamics platform. The goal is to extend the basic capabilities to specific verticals and tangential applications to CRM and ERP. Eventually, Dynamics will find its way into the cloud, where it may become more accessible to midmarket and small businesses.

All of this adds up to where the true value in technology resides, data. But data alone isn’t good enough. Like iron ore and crude oil, raw data is relatively useless until it’s refined into real intelligence. What IBM, HP and Microsoft are aiming to do is become the refineries of the next information age.

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