IBM to Acquire Varicent

IBM said Friday it plans to purchase sales performance management analytics provider Varicent Software Inc. for an undisclosed sum.

Varicent software provides automation, analysis and compliance for data from sales, HR and IT departments under a unified management system. The transaction would tie in particularly with IBM’s new and updated slate of analytics software and services, which it introduced last month during its Smarter Analytics Summit, the company stated in a news release on the proposed deal.

Les Rechan, GM of business analytics for IBM, said in a news release that the deal pushes forward IBM’s introduction of analytics to more front-line business users.

"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.

IBM has kept in line with HP, Oracle and SAP in a series of analytics offerings and transactions announced by the competing vendors in recent months. In December, IBM made a $440 million deal for marketing and retail analytics provider DemandTec.

Ventana Research ranked Varicent as the “hottest” vendor in the sales performance space last year. Ventana CEO and Research Director Mark A. Smith said the proposed deal gives IBM a new and “direct presence” in applications dedicated to the sales performance analytics arena. Smith also sees it as a challenge to some of IBM’s rivals as well as an opportunity for acquisition by other niche sales analytics providers.

“Now, Oracle, Salesforce and SAP need to determine if they want to be a strategic provider in SPM as they do not have the depth and level of applications that Varicent had which is now going to become part of IBM,” says Smith. “This leaves Callidus and Xactly as SPM providers that could be the next to be acquired by the other large application providers.”

Based in Toronto, Varicent was founded in 2003 and touts more than 180 customers including Manpower, Office Depot and Farmers Insurance, according to its website.

President and CEO Dan Shimmerman is a former executive with Clarity Systems, a financial governance and compliance analytics provider which IBM purchased October 2010 after Shimmerman had already moved on to Varicent.

Varicent is privately held and financial details were not disclosed by IBM. The deal is expected to close in the second quarter of 2012, with Varicent’s employees joining IBM’s Software Group, according to an IBM news release.

This story first appeared on the website of Information Management.