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IBM Acquires Varicent for Sales Data Analytics

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Posted April 13, 2012 By Pedro Hernandez     Feedback

Big Blue targets sales organizations as it snaps up another business intelligence and analytics specialist.

IBM today announced that it is acquiring Toronto-based Varicent, a maker of incentive compensation and sales performance management (SPM) software.

IBM and Varicent expect the deal to close in the second quarter. All of Varicent's employees are expected to join IBM Software. The deal's terms were not disclosed.

The privately held company provides software that automates sales data analysis and reporting, giving enterprise and mid-market organizations insights into their sales performance and how to improve upon it. Varicent's offerings also help organizations manage incentive compensation, sales territories and quotas using a centralized interface.

Another selling point: transparency.

According to the company, its software can aid organizations in keeping their metrics, particularly those surrounding compensation, above board. The objective is to help companies breeze through audits and compliance checks. Varicent's customers include Starwood Hotels, Hertz and Office Depot.

Vericent's technology will be folded into IBM's Smarter Analytics portfolio, according to Les Rechan, general manager of IBM's business analytics unit. With this latest acquisition, IBM sees an opportunity to drive efficiency in sales organizations and hints at exploiting a core capability of Big Data analytics. Namely, the ability to unlock insights currently stored in disparate IT systems and software applications.

It might also get sales managers to ditch their Excel sheets. "For the thousands of sales organizations still relying on silos of data, spreadsheets and e-mail to manage sales, there is an enormous opportunity to apply analytics to this vital area of business and uncover new, untapped growth opportunities," said Rechan in a company release.

For Varicent's CEO, Dan Shimmerman, it's time to demystify SPM. "Sales Performance Management is still viewed by many in the industry as an art versus a science, but there is plenty of opportunity for this mind set to change,"  he says. The companies cite data from Gartner stating  that compensation management tech can result in an over 90 percent reduction in errors. Processing times drop too, by more than 40 percent, says the research firm.

Billions Spent on Analytics

The Varicent deal is just the latest in IBM's efforts to bulk up its analytics business. In September, IBM parted with $387 million for Algorithmics, a specialist in risk analytics for financial services. A year earlier, it acquired enterprise compliance and risk management developer OpenPages.

Underscoring its commitment to analytics, IBM revealed that it is now home to "9,000 dedicated business analytics and optimization consultants and 400 researchers." That's an increase of 1,000 consultants since September, when IBM said it had spent $14 billion in five years on strengthening its analytics product and services slate.

These investments continue to resonate throughout IBM's roadmap. In March the company referenced the "dozens of acquisitions" that influenced and contributed technology to its new Big Data offerings called Analytics Signature Solutions.

Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.

 

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