IBM Spends $440 Million Acquiring Cloud-Based Analytics Firm

Paul Lilly

Tis the season to shop around, and while you're out there buying gifts, sometimes you have to splurge on yourself. That's what IBM is doing, which announced that it has entered into a definitive agreement to acquire DemandTec, a cloud-based analytics company, for around $440 million in an all-cash transaction. IBM is hoping the acquisition will extend its Smarter Commerce initiative by adding cloud-based price, promotion, and other merchandising and marketing analytics to its portfolio.

"DemandTec has unprecedented capability to improve customers’ price and promotion tactics on a stand-alone basis and connect retailers and manufacturers for collaborative planning through the cloud," said Dan Fishback , President and Chief Executive Officer of DemandTec. "IBM Smarter Commerce is the perfect fit for DemandTec. IBM is the only provider of price and promotion offerings within a rich solution set that supports companies’ buy, market, sell and service processes."

Even for IBM, $440 million isn't exactly chump change, but justifiable given that IBM estimates the market opportunity for Smarter Commerce to be around $20 billion in software alone.

DemandTec is home to 350 employees and headquartered n San Mateo, California, with additional offices in Minneapolis, London, Paris, and Bangalore. The acquisition is expected to close in the first quarter of 2012.

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