IBM: governments still spend on analytic software

Dubai: Government austerity measures will not affect the sale of analytic software and services, said Steve Mills, the senior vice-president of software and hardware for International Business Machines (IBM).

IBM, one of the largest software companies in the world, says it has made huge investments in analytics services in the past decade.

Dubbed "Smart Planet" solutions by the company, they focus on transportation, energy, including power distribution, telecommunication infrastructure, and even aspects of water distribution.

But government spending following the global financial crisis has fallen as many look for ways to cut spending and reduce debt.

"We're not seeing an abatement of government interest and government spending on these kinds of projects," Mills said.

"Even stressed governments in the United States — and we're doing water supply-related projects for municipalities in the US and these municipalities are clearly stretched, often with significant bonds obligations and significant debt — and yet they are still spending money."

Analytics involves using data from a large number of sources such as the web or hardware, to give governments and private companies a better view of what is happening in real time, such as an energy company being able to anticipate a surge in demand.

Mills said it allowed governments and businesses a greater ability to manage risk by allowing them to see a little into the future.

"Since you can't really see [the future], the best you can do is collect data about what's happening and then use it to try and become predictive," he said.

The technology also has other applications, such as data mining or measuring consumer feedback.

"Clearly companies are looking at how do I mine the web, at how to understand the sentiment better," Mills said.

"If I'm in a consumer-facing business, what's consumer sentiment telling me? Governments are anxious to know how they can understand the sentiment of the citizenry."

IBM said it would also continue to acquire companies that could provide IBM with technology in that area.

"We'll continue to do acquisitions that will continue to fit into the same categories that we've been investing," he said. "We've bought quite a few companies in the area related to analytics."

IBM, based in New York, announced fourth quarter earnings of $29 billion (Dh106.5 billion) on January 18, up 7 per cent and net income or $5.3 billion, up 9 per cent.

Total revenue for 2010 was $99.9 billion. Revenues from the combined Europe, Middle East, and Africa were $9.5 billion, down 2 per cent. IBM wants to boost its analytics revenue to $16 billion by 2015, but faces tough competition from Oracle and SAP AG.