IBM Continues Analytics Buying Spree

IBM has opened its business analytics wallet, buying i2 and Algorithmics.

IBM(IBM), again flexing its business analytics muscles, spent $387 million to grab Canadian risk management specialist Algorithmics, which follow’s Wednesday’s deal for U.K. security software firm i2.




As of Thursday, IBM has completed 26 business analytics acquisitions over the last five years, spending more than $14 billion. The tech giant plans to use its latest purchase to drive fresh financial sector revenue, according to Gordon Burnes, an IBM business development director specializing in analytics.


“This particular acquisition will help fuel our growth around business analytics in the risk management arena,” he told TheStreet. “There are major regulatory and macro-economic drivers that are encouraging companies to take a look at how they are managing risk across the business.”
Algorithmics sells software for assessing financial firms’ business processes and identifying areas where they could fall foul of regulations such as Reg FD for information disclosure. The software could also be used to analyze, say, the risk posed to investors by hedging a set of derivatives against a bank’s portfolio of loans.

“[Investors] are demanding greater transparency into risk,” said Burnes.
Companies using Algorithmics’ products include HSBC, Societe Generale and Nomura.
IBM Boosts Its Global Security Offerings
Cambridge, U.K.-based i2, on the other hand, sells analytics software to tackle crime, fraud and security threats. The company’s software is used by eight of the top ten companies in the world, according to IBM, and spans industries like retail, banking, law enforcement and national security.
Allan Krans, an analyst at Technology Business Research (TBR), believes that the i2 deal was driven by IBM’s desire to boost its overseas presence. “The acquisition of i2 is the latest example of the company’s effort to grow government revenue outside its home geography,” he wrote in a research note. ” i2 brings IBM a strong presence in a number of European government organizations, as the company counts 4,500 customers and 25 of the 28 NATO member nations as customers.”