IBM has acquired big-data vendor The Now Factory to make a bigger push into customer experience management (CEM), the companies confirmed on Tuesday.
Ireland-based The Now Factory (TNF) provides analytics software to communication service providers, designed to help them identify new revenue opportunities and improve their CEM capabilities.
According to Caroline Chappell, Heavy Reading analyst and Service Provider IT (SPIT) expert, TNF goes beyond traffic and packets to actually give mobile operators visibility into how mobile apps are performing on the networks. So, for example, an operator could determine what kind of experience Facebook users on a particular cell are getting. It's this kind of end-user visibility and control over the customer experience that's needed in an end-to-end CEM solution, Chappell says. She told us:
What's interesting is that IBM has invested millions of dollars in its own mobile analytics R&D. It made announcements about this two to three years ago, but now it's gone and bought a product company. That suggests to me that it needs a productized solution in a market that wants to do CEM cost-effectively -- not as a large consultancy exercise, which tended to be what IBM has sold to date.
For its part, IBM Corp. (NYSE: IBM) says it will merge TNF's software with its existing big-data platform and use the acquisition to "capitalize on the opportunity to analyze data in real time." As another example, it cites using TNF's software to analyze customer usage of 3G and 4G LTE data services to identify high volume pre-paid subscribers as a potential use case for operators. Armed with this acquisition, the software giant sees its big-data and analytics strategy expanding to $20 billion in revenue by 2015.
Terms of the deal were not disclosed, but the pair expects it to close in the fourth quarter, at which time TNF will become part of IBM's software group.
Why this matters
The term big-data may be overhyped, but the importance of building a solid CEM strategy cannot be overstated. This is something that big vendors seem to realize as acquiring in the CEM space has become something of a trend in the past year. In May, Intel Corp. (Nasdaq: INTC) acquired API company and fellow Irish independent Aepona. And, just last month Amdocs Ltd. (NYSE: DOX) scooped up Actix to strengthen its CEM play. (See Intel Adds to Its SDN Arsenal and Amdocs Dives Into Mobile SPIT Pool.)
Heavy Reading's Chappell suggests that Guavus, an innovative big-data startup and Leading Lights award finalist, could be the next to attract M&A attention. (See 2013 Leading Lights Finalists: Company of the Year (Private).)
- Telco Analytics Firm Raises $30M
- Carriers to Pump More Cash Into CEM
- Vodacom Renews Now Factory Contract for CEM
- CSL Deploys The Now Factory's CEM
— Sarah Reedy, Senior Editor, Light Reading