IBM has acquired Algorithmics, a company that provides risk management software for banks, in a deal worth $387 million.
The purchase follows Wednesday's acquisition of i2, a crime data analysis firm, for an undisclosed amount. Both deals highlight IBM's increasing investment in data services.
"With AI capabilities like Watson and the 'human brain' machine, [IBM] is very much in the forefront of using massive processing capabilities and huge databases to produce decision making that looks a lot like ours," Roger Kay, lead analyst at Endpoint Technologies, told Wired.
IBM expects its business analytics division to account for 20 percent of the company’s overall revenue (roughly $16 billion) by 2015, IBM's VP of business partnerships Ilse Cilliers told a conference in April. In the last two years, it has doubled its consultancy workforce to 8,000 and spent roughly $14 billion on analytic-focused acquisitions.
Big Blue is finding increasing demand for these services among customers such as the city of Portland, Ore., which recently hired IBM to create algorithms that analyze information culled from interviews with city workers to predict the impact of proposed city policies.
“We can look at things like how a change in bus fare would affect high school graduation rates,” said John Buscemi, a spokesman for the program told Wired in an interview.
The University of Texas at Austin and IBM have partnered on a program that aggregates the topography and flow data of local watersheds and predicts the areas that will be first and worst affected by flash-flooding, a common and often deadly problem in the region. The program analyzes over 9,000 miles of rivers and creeks and makes predictions up to four days in the future.
It is still too early to tell if either of these programs will be successful, but these types of complex real-world problems are increasingly shaping the future of computing services.
