IBM Gets Intelligent

Don't you wish you had a crystal ball handy to predict changes in the business world? Well, IBM (NYSE: IBM) is building it for you, one piece at a time.

The latest addition to Big Blue's clairvoyant family of tools is data mining specialist SPSS (Nasdaq: SPSS). The maker of advanced pattern-recognition software that helps business leaders predict future supply and demand patterns, among other things, just agreed to join IBM in return for a $1.2 billion pile of cash. The deal will introduce a new giant into a predictive analytic products market that's traditionally been split up between the likes of SPSS and small-fry neighbors such as Fair Isaac (NYSE: FIC) and Teradata (NYSE: TDC) that use the predictive analytics for a variety of solutions.

"Know what your customers will do ... before they do it!" is the cheerful mantra of SPSS. It fits right into IBM's Smarter Planet strategy, in which the company helps governments and businesses the world over build advanced power grids, banking processes, inventory management systems, and much more.

I've long held that nobody can predict business trends quite like Cisco Systems (Nasdaq: CSCO), based on the networking giant's partner-happy attitude and ubiquitous presence across every sector of the business world. But IBM is becoming a formidable match for Cisco on both of those counts, and seems intent on striking gold under that predictive umbrella to boot. This acquisition will certainly play right into those ambitions. Move over, Cisco.

Neither IBM nor Cisco will ever manage to build the perfect predictive system, of course, regardless of their ambitions and acquisitions. Not even Google (Nasdaq: GOOG) has that kind of power, despite its access to untold billions of search habit patterns and deep data stores.

That doesn't mean that these fine companies shouldn't try to jump over the moon, though. High-quality data mining tools like the SPSS suite use advanced methods of mathematics and statistics to arrive at much better guesses than flipping a coin, or depending on a CEO's gut instinct. Like I said, this is a great fit for IBM, which is becoming less and less like the IBM of our fathers. And I mean that in a good way.