IBM acquires DemandTec for $440 million

Jennifer Scott News
8 Dec, 2011

Big Blue looks to boost its ‘Smarter Commerce’ portfolio with cloud marketing and sales software.

IBM today announced it had entered into a definitive agreement to buy DemandTec for $440 million (£281 million).

DemandTec offers analytics software delivered as a service for retailers, allowing them to examine buying habits both in-store and online. The idea is to enable the owners to find out what is selling to whom and work out ways of attracting more customers to part with their cash.

IBM hopes to incorporate the technology into its Smarter Commerce initiative – something Big Blue believes will generate $20 billion in software revenue – which already aids businesses to “buy, market, service and sell” for their customers.

With DemandTec onboard, it plans on adding cloud-based price and promotion analytics, alongside further marketing tools.

“IBM Smarter Commerce is redefining how brands buy, market, sell and service their customers in ways that their customers want,” said Craig Hayman, general manager of industry solutions at IBM.

“Bringing science to the art of pricing and promotion is a big part of this strategy and the combination of DemandTec and IBM will help marketing and sales executives in retail and other industries drive more revenue and increase profitability.” 

On top of the current technology it sells, DemandTec also holds 31 patents in pricing, response analysis and promotion analysis, which IBM will be happy to get its hands on.

DemandTec’s 350 employees will be moved into IBM’s software group when the deal closes – expected for the first quarter of 2012.

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