IBM Just Bought This Cool Little Company

Virginia Rometty

IBM today bought Varicent, a small Toronto company that makes software to analyse how commissioned salespeople are performing.

Varicent has got a laundry list of 180 customers including Waste Management, Robert Half, Farmer’s Insurance and Bank of the West.

It’s hard to believe that IBM, the folks who invented the smartest analytics computer of all time, Watson, still needs to beef up its portfolio with more analytics software. IBM says it has 9,000 employees and 400 researchers working on analytics.

But Varicent did have a corner on an interesting niche. It uses big data analytics to tell companies if its sales incentives and compensation plans are really working. A lot of that data is kept in Word documents or spreadsheets throughout a bunch of departments like finance, sales and HR. Varicent software collects all that to uncover trends.

Varicent’s tech will be combined with IBM’s other analytics software and will also be available as a cloud service.

The buy points to a bigger trend in employee management software. There’s this growing shift towards using cloud-based services for real-time employee feedback systems. The same kinds of things that can detect fraud in real-time should work to detect if a project is heading off the rails in real time.

Terms of the deal were not disclosed. According to InsideCRM, Varicent had 60 employees and annual sales of about $7 million.

This is IBM’s third acquisition of the year. It previously bought Green Hat, makers of cloud testing tools and mobile app developer Worklight. This follows a bunch of acquisitions in the fall, including three in December.

Expect more to come. IBM has vowed to spend $20 billion by 2015 on acquisitions.

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