IBM Buys Coremetrics to Strengthen Analytics Offerings

Business software and services behemoth IBM has acquired Web analytics firm Coremetrics. The move marks one of many in IBM’s path toward building its marketing analytics business.

“When we integrate this with our offerings such as commerce… we’re creating a footprint here for customer experience, customer service, and marketing,” said Beth Ann Vaughn, IBM’s integration executive for the deal.

The two firms have partnered in the past, according to Vaughn, who said IBM has offered Coremetrics products to its clients, while Coremetrics has recommended IBM offerings to its own customers. IBM’s website currently touts Coremetrics as its partner for cross-channel business analytics, in conjunction with IBM’s WebSphere Commerce software.

Coremetrics, among the most prominent Web analytics firms, offers Web-based software for tracking and analyzing internal site data, customer interactions, and social networks for marketing customization and optimization. IBM will house Coremetrics offerings within the WebSphere product suite as part of its application and integration software division.

“We’re not going to make wholesale changes to names,” Vaughn said of Coremetrics products. According to IBM, Coremetrics’ 230 employees will be integrated with IBM staff.

IBM predicts it will generate $16 billion in business analytics and optimization revenue by 2015, according to a company statement. IBM also acquired predictive analysis and data mining firm SPSS last year, and business intelligence software company Cognos in 2007. In addition, IBM has announced its intent to buy Sterling Commerce, an AT&T-owned company that offers an e-commerce platform, as well as B2B collaboration software.

IBM expects the Coremetrics acquisition to help it expand services for current clients and bring in new ones. According to Vaughn, customers in sectors such as retail, financial services, and travel could benefit from the deal. “For example, you could better monitor what customers are doing on your service portal if you’re in the financial services sector,” she said.

Adobe purchased Coremetrics competitor Omniture in 2009, surprising industry observers since Adobe’s core business lies in its creative design software. Vaughn suggested that the Omniture sale did not influence IBM’s decision to buy Coremetrics, in part because IBM’s business strategy is broader than that of Adobe. “I don’t think what Adobe was doing had that much influence,” she said.

Webtrends could be viewed as ripe for acquisition now that its Web analytics industry rivals Coremetrics and Omniture have been scooped up.

Coremetrics serves over 2,100 brands in the financial, retail, media, travel, and education categories including Bank of America, 1-800 Flowers, Office Depot, Virgin Atlantic Airways, and Seton Hall University.

IBM expects the deal to close in Q3 of this year. The firm did not disclose financial terms of the deal.

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