QUOTE AND NEWS
Mondo Visione  Aug 7  Comment 
The Chartered Institute for Securities & Investment (CISI) is pleased to welcome the Isle of Man Financial Supervision Commission announcement of CISI’s agreement to be an accredited body issuing Statements of Professional Standing...
Mondo Visione  Jun 25  Comment 
The Securities and Exchange Commission today announced it has charged two additional brokers with trading on inside information ahead of the $1.2 billion acquisition of SPSS Inc. in 2009 by IBM Corporation.  The SEC alleged that former...
Reuters  Sep 12  Comment 
An Australian financial analyst pleaded guilty in federal court on Thursday to trading on inside information ahead of the $1.2 billion acquisition of software company SPSS by IBM in 2009.
Forbes  Jul 11  Comment 
Prior to graduating from MIT in 1995 with a degree in architecture and mechanical engineering, Matt Cutler started Netgenesis -- it helped webmasters analyze site performance -- that went public in 2000 and was bought for$44 million in...
Forbes  Apr 4  Comment 
I am frequently asked by the press for my opinion about the latest, greatest insider trading case -- which, apparently, is whichever case was most recently filed by the Department of Justice or the Securities And Exchange Commission.  A while...
Mondo Visione  Mar 29  Comment 
Trent Martin was extradited from Hong Kong yesterday to face insider trading charges, announced U.S. Attorney for the Southern District of New York Preet Bharara and Assistant Director-in-Charge of the FBI New York Field Office George Venizelos,...
Cloud Computing  Jan 16  Comment 
In a recent interview with DataInformed's Ian Murphy, I discussed the history of the open-source R project and how Revolution Analytics is building on R to compete with legacy statistical software such as SAS and SPSS. Other topics we touched on...
Mondo Visione  Jan 2  Comment 
The new FSA Retail Distribution Review (RDR) regime become effective from 1st January 2013 and the Chartered Institute for Securities & Investment (CISI) has issued 5,421 Statements of Professional Standing (SPS) to existing advisers seeking to...
Mondo Visione  Dec 26  Comment 
The Securities and Exchange Commission today announced additional charges in an insider trading case against two brokers who traded on nonpublic information ahead of IBM Corporation’s acquisition of SPSS Inc. Additional...





 

SPSS Inc. (SPSS), incorporated in 1975, is a global provider of predictive analytics technology and services. The Company provides two classes of software and service offerings to two distinct audiences. For analysts proficient in the use of data analytic methods, it offers statistical, data mining and business intelligence software tools to examine and predict from a range of enterprise data. For business people acquainted with, but not proficient in, data analysis techniques, SPSS delivers predictive deployment solutions that embed the power of predictive analytics directly into particular business processes. The Company sells its short sales cycle offerings through telesales and its long sales cycle offerings through field sales organizations configured geographically and by vertical industries. The Company's primary targeted vertical industries include the insurance industry, the financial services industry, the market research industry and the public sector. Approximately two-thirds of the Company's revenues come from commercial firms, many of which use SPSS technology. Among its government customers, SPSS' offerings are primarily used to improve interactions between public sector agencies and their constituents or detect forms of non-compliance. At colleges and universities, the Company's statistical and data mining tools are standards for teaching data analysis techniques and academic research. SPSS software tools enable customers to access and prepare data for analysis, develop and deploy predictive models and generate reports and graphs to present the results. During the year ended December 31, 2006, the Company began the process of streamlining the tools offerings into an integrated suite of products. As of December 31, 2006, there are three families of products that fit under the Predictive Tools umbrella. Together, the Predictive Tools represented 76% of total revenue during 2006. The Company's predictive tools are in function, spanning the entire process of data analysis; modular, allowing customers to purchase only the functionality they need; integrated, enabling the use of various parts of the SPSS technology in combination to tackle problems; tailored to desktop operating environments for use, including browser-based environments for the delivery of results; available on computing platforms, and for some products, translated and localized for use in France, Germany, Italy, Poland, Japan, Taiwan, Korea, China and Spanish-speaking countries. The Company's primary statistical tools are part of its principal SPSS product line. These tools are modular in nature and designed for use by research analysts working in a variety of commercial, governmental and academic organizations. While varying by version and computing platform, a purchase from the SPSS product line includes an SPSS Base product and related optional add-on modules. The SPSS Base includes the user interface, data connectivity, data editing, reporting, graphing and general statistical capabilities. Add-on modules require the SPSS Base to operate and become integrated with SPSS Base upon installation. These optional offerings provide additional statistical functionality specific to particular types of analysis. The Data Mining Family primarily consists of the Clementine data mining workbench with optional add-on modules for text mining and predictive Web analytics. These products feature process-oriented visual user interfaces and artificial intelligence-based algorithms. In 2006, products from the Company's Data Mining Family and Statistics Family were integrated with the release of Clementine 11, which allowed the Data Mining Family to gain additional data transformation, analytical functionality and data visualization capability from the Statistics Family. The Business Intelligence Family consists of the ShowCase product line. ShowCase products support information access, data warehousing, online analytical processing (OLAP) and other analytical applications for the IBM eServer iSeries (AS/400) computer market. The Company's deployment solutions combine SPSS tools with deployment technologies and services to apply predictive analytics in business operational systems. These deployment solutions consist of both pre-packaged applications, such as PredictiveMarketing and PredictiveClaims and custom-configured solutions that would combine a series of predictive tools to create a customized offering. SPSS' enterprise feedback management (EFM) offering, Dimensions, is a robust technology platform that supports the end-to-end survey process. Dimensions provide work processes around surveys, analysis of data, and means of delivering results to clients. The Company competes with SAS, StatSoft, Inc., Minitab, Inc., Insightful Corporation, StataCorp, NCR Corporation, Fair Isaac Corporation, KXEN, Inc. and Angoss Software Corporation

Industry Background

The Software Design Industry consists of companies providing PC software, middleware, enterprise application software, and other computer software products. These products help businesses, governments, banks, and other organizations run, manage, and automate their IT operations.

Application software industry is represented by number of companies ranging from large cap conglomerates to microcap niche players. We are looking at companies that develop business intelligence software; with players being SAS, SAP, Oracle, Microsoft, Adobe, Fair Isaac,SPSS, NCR, KXEN, Choicepoint, Unica, Computer Associates, etc. This is a growing segment of software market with double digit annual growth.

SPSS is a midsize player in the business intelligence software; with 75% percent of their revenues coming from predictive analytics line of products (this qualifies them to be a niche player)

Within Business Intelligence industry, SPSS targets the following market segments: "Advanced Analytics" tools and analytical customer relationship management (CRM) applications defined by International Data Corporation (IDC) in its research reports entitled Worldwide Business Intelligence Tools 2006-2010 Forecast, Worldwide Business Intelligence Tools 2005 Vendor Shares, Worldwide CRM Analytic Applications 2006-2010 Forecast, and Worldwide CRM Analytic Applications 2005 Vendor Shares.

The business intelligence industry

According to IDC, The worldwide business analytics market grew at 11% and is expected to continue to grow at a healthy compound annual growth rate of 10.3%

Regional share:











The market shares of the major players are:







Market trends:

Historical analysis suggests that most markets experience a typical s-curve pattern. This pattern begins with early modest growth, which is followed by accelerated growth and then a mature period with a slowdown in growth, and it ends with a decline until a new market cycle resumes. The BI tools market is currently in its third s-curve market cycle and is only in the third year of the current cycle.

Therefore, IDC expects acceleration in the BI tools market starting in 2009. What remains to be seen is whether this acceleration will be manifested in revenue to software vendors or simply through the broader reach of BI. One of the current trends is general price competition. Although IDC does not track BI tools unit sales, survey research consistently points to more users being given access to BI tools. However, a counteracting force is price pressure, which is expected to continue as confirmed by end users reporting that they have more negotiation power. The net effect could be a growth in the market without an equal and corresponding growth reflected in the revenue of software vendors.





Advance Analytics segment The global market for "Advanced Analytics" tools, a new IDC sector that consolidates the former sectors of statistical software and data mining software is growing at 11.6%. In 2005, this market was approximately $1.15 billion in size with SPSS holding approximately 13% of its market share. IDC estimates that this market will increase by approximately 10% per year and reach approximately $1.9 billion in size by 2010.



Customer relationship management (CRM) applications The global market for analytical customer relationship management (CRM) applications is growing at 9.8%. In 2005, this market was approximately $1.14 billion in size with SPSS holding approximately 3% of its market share. IDC estimates that this market will increase by approximately 10% per year and reach approximately $1.8 billion in size by 2010.

In 2005, these target markets, combined, represented approximately $2.3 billion in revenue with SPSS holding approximately 10% of the total market share. IDC estimates that these two target markets, together, will represent a total of approximately $3.7 billion in revenues by 2010.



Segment size




References

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