Thoughts on IBM's acquisition of Coremetrics …

By now you’ve heard that IBM announced today their intent to purchase Coremetrics. While I was caught off guard by the news — it was all over Twitter before I’d had a single drop of Espresso — I cannot say I was particularly surprised. Coremetrics has not been particularly coy about their intent to do what is best for their customers and company, and IBM is on a tear for acquisitions and investment in analytics with over $10 billion spent on 14 (now 16) acquisitions since 2005 including SPSS, Cognos, and now Coremetrics.

In fact, according to CMS Wire, IBM is now #2 behind privately held SAS for analytics market-share (14.5% versus SAS’s 33%.)  Couple this with the consulting services organization IBM established just over a year ago and the picture becomes incredibly clear: IBM has the potential to become a digital analytics juggernaut in the Enterprise.

You know what? I’m excited about this.

I’m excited for three reasons, none of which are particularly altruistic of me considering that I am a strategic business consultant who has spend years working to elevate the visibility of digital analytics within the Enterprise. From my point of view, my partners and I (and our peers) will only be more successful as traditional business pays more attention to the value of digitally collected data as an input to business intelligence.

But I digress.

I’m excited by IBM’s acquisition of Coremetrics for these three reasons:

1. This acquisition validates my “Coming Revolution in Web Analytics” thesis. In 2009, with the support of SAS, we postulated that we were on the cusp of a grand revolution in web analytics, one that had profound implications on both the practice and the practitioner. In the same way SAS continues to refine their web and customer experience analytics offerings, IBM buying Coremetrics pushes us further along towards what I believe is an inevitable future where digital analytics is powered as much (or more) by statistical and predictive models as “pretty” spreadsheets and iPhone viewer apps.
2. This acquisition validates my “Two Sets of Tools” thesis. Back in February of this year I wrote a post about the need for two sets of tools to do digital analytics professionally. I wrote this post in response to a dramatic increase in the number of companies telling us their business users were frustrated with the complexity of the most widely deployed “Enterprise” web analytics tools. While Coremetrics 2010 is certainly not perfectly suited for business users of all shapes and sizes, I do like what they’ve done with the recent release (view source on the main site!) More importantly, Coremetrics plus SPSS is essentially the bifurcated solution I describe appropriate for deployment within large companies.
3. This acquisition has tremendous potential to elevate the visibility of “digital analytics” within business leaders across the globe. One of our vendor clients commented today “don’t you think the need for web analytics has been validated already?” to which I could only respond “no.” Everywhere we go — conferences, clients, prospects, social events, you name it — we continue to see a half-hearted expression of commitment by senior leadership for web and digital analytics. Don’t get me wrong — they are 100% committed to connected efforts! Leadership LOVES mobile apps, social media, Flash and Flex and Silverlight and the iPad and QR codes and … well, you get the idea. But in my experience when it comes to investing in the measurement of those efforts to validate their value to the business, well, let’s just say interest seems to wane. My hope is that with IBM backing digital analytics and pushing Coremetrics as part of their portfolio that this will change much more quickly than it would with, say, Adobe pushing the same agenda (sorry, sorry, sorry!)

My last point is clearly the most important. For web analytics to truly “grow up” and mature into the valuable contributor to the entire business we all know (or at least suspect) it can be, it has to become a greater priority for senior leadership. And despite the fact that the people I respect the most — guys like Jim Sterne, Gary Angel, and Josh Manion — continue to do the real evangelical work, pounding their fists and respectfully raising their voices in an attempt to get management to pay attention, I suspect that John Squire and Joe Davis injected into the analytics sales process at IBM has far greater potential to change minds and focus within corner offices.

Sorry to put that on ya, Squire. Let me know if I can help.

Since I was slow to get this post up two other well-written and thoughtful pieces about the acquisition have been published that I would encourage you to read:

• Akin Arikan (Unica)’s “Farewell to Web Analytics” post, which I think is a little hopeful on Akin’s part but should be expected as IBM is a large Unica customer and so this deal creates some risk for Akin and his team;
• Joe Stanhope (Forrester)’s take on the deal. Joe was lucky enough to have dinner with John Squire last night and has a lot of detail about IBM’s opportunity.

Again I am really excited for Coremetrics management and staff. Personally I think that IBM made a great decision, one that will create benefits for everyone truly committed to digital analytics.

As always I welcome your thoughts.