IBM Advances Analytics with Acquisition of Coremetrics

Mark Freidin

16th Jun 2010

IBM Advances Analytics with Acquisition of Coremetrics
Addition of web analytics enhances IBM business analytics strategy

ARMONK, NY – June 15, 2010 – IBM (NYSE:  IBM) today announced a definitive agreement to acquire Coremetrics, a leader in web analytics software.  Coremetrics, a privately held company based in San Mateo, CA, will expand IBM’s business analytics capabilities by enabling organizations to use a cloud-based delivery model to gain real-time insight into consumer interactions internally and through social media networks to develop faster, more targeted marketing campaigns.  Financial terms were not disclosed.

Organizations are increasingly looking for ways to optimize their marketing processes and gain deeper insights into client demands in order to drive brand loyalty by executing more personalized customer interactions.  Companies are faced with an increasingly complex set of digital outlets to interact with customers, ranging from websites and mobile applications to e-mail and social media sites.  Businesses must continuously focus on enhancing the customer brand experience and respond quickly to marketplace changes to differentiate themselves.

Results from IBM’s 2010 CEO Study showed that 88 percent of CEOs will focus on getting closer to their customers in next five years, 82 percent of CEOs want to better understand customer needs and 85 percent of CEOs require more visibility into their businesses.

Relevant business information is being generated every second on the web.  Today, 70 percent of a consumer’s first interaction with a product or service takes place online. Through Coremetrics, IBM is gaining the ability to help businesses rapidly gain intelligence into social networks and online media sources through a cloud-based delivery model and incorporate this insight into their business processes to create smarter, more effective marketing campaigns.

Today Coremetrics delivers web analytics capabilities to more than 2,100 global brands across a wide range of industries including retail, financial services, media and publishing, travel and hospitality and education.  Customers include Bank of America, Holiday Inn, PETCO, 1-800 Flowers, Office Depot, Victoria’s Secret, Virgin Atlantic Airways and Seton Hall University.

Coremetrics’ offerings enable more effective marketing campaigns that can provide real-time intelligence on what consumers are saying about products and services being offered to them, and allow clients to make fact-based, accurate decisions on marketing expenditures. As a result, marketing teams can gain deeper insight about their consumers and present personalized recommendations, promotions and other sales incentives across a variety of channels where the consumers interact with their brand. These channels span traditional outlets such as storefronts and catalogs and newer outlets including all forms of eCommerce and social media.

Coremetrics’ offerings are a new addition to IBM’s business analytics portfolio. By acquiring Coremetrics, IBM will be able to deliver powerful new business analytics solutions, with the web analytics capabilities clients need to help measure the effectiveness of their marketing campaigns and understand the shopping habits, likes and dislikes of their customers. In addition, Coremetrics software complements IBM’s existing software and services portfolio of offerings from WebSphere, information management and business analytics and optimization.  Upon closing, the company will become part of IBM’s application and integration middleware portfolio which provides the backbone of transaction processing on the Web and powers many of the world’s leading retail sites. Through Coremetrics, IBM is gaining the ability to help businesses empower their marketing professionals to automate and optimize their marketing processes to create the greatest possible return on their marketing expenditures.

“With this acquisition, we are extending our capabilities to give clients greater insight about customer behavior and sentiment about products and services, and gives true foresight into their future buying patterns,” said Craig Hayman, general manager, IBM WebSphere. “Marketing departments can benefit from these capabilities very quickly because we are delivering this in a Software-as-a-Service model. The combination of IBM and Coremetrics will maximize marketing expenditures and also make the buying experience more convenient, personal and interactive for consumers.”

“Marketers increasingly need the ability to see across their organizations and the agility to make split-second decisions based on real-time data,” said Joe Davis, CEO, Coremetrics. “The combination of Coremetrics and IBM will deliver deeper business insights to address the real challenges and opportunities all companies face in an increasingly digital world.”

Consistent with IBM’s software strategy, IBM will continue to support and enhance Coremetrics’ technologies and clients while allowing them to take advantage of the broader IBM portfolio.  Coremetrics’ approximately 230 employees will be integrated into IBM. The deal is expected to close in the third quarter of 2010, subject to regulatory approvals and the satisfaction of other customary closing conditions.

IBM’s acquisition of Coremetrics extends the company’s analytics strategy, that includes a range of offerings available through IBM’s Business Analytics and Optimization Consulting organization which includes a team of 5,000 consultants, a network of analytics solution centers, and is backed by an overall investment of more than $11 billion in acquisitions in the last five years.

The IBM Software Group has acquired more than 55 companies since 2003.