SPSS Has A New ShowCase
On November 7, 2000, SPSS (NASDAQ: SPSS) announced that they have signed
an agreement to purchase ShowCase Corporation (NASDAQ: SHWC). SPSS expects
that this move will bolster its presence in the analytical customer relationship
management market (as versus operational CRM). The transaction is expected
to be concluded during the quarter ending March 30, 2001 and is valued
at $94 million. Under the terms of the deal, one share of SPSS will be
given for each three shares of ShowCase.
is a leader in analytical solutions which enable organizations to develop
more profitable customer relationships," said Jack Noonan, SPSS president
and CEO. "and we expect this key acquisition to move SPSS ahead in the
marketplace, faster. ShowCase adds to the number of capable people we
have selling and implementing our analytical solutions, broadens our technology,
opens us to a new, solid customer base, brings new management talent and
improves our cash position."
agreement benefits all the main stakeholders: customers, shareholders
and employees," said Ken Holec, president and CEO of ShowCase. "Combining
the strengths of ShowCase and SPSS will accelerate our delivery of CRM
analytic solutions, bringing more products to customers and prospects
just as the CRM Analytics and AS/400 markets are poised for explosive
growth. A history of strong balance sheets and earnings, paired with this
future market growth potential, will greatly benefit our shareholders.
And our customers can now add the predictive capabilities of SPSS data
mining to the measurement capabilities of ShowCase analytics. Employees
will enjoy pooling expertise and resources to deliver better solutions
faster and will benefit from greater career opportunities in a larger
organization. The interaction of the organizations will be facilitated
by a common culture that values employee innovation and dedication."
Mr. Noonan believes that the analytical CRM market is going to expand
by at least 50 percent per year. SPSS covers all market sizes, and a customer
base of over 250,000. ShowCase has concentrated on the mid-market, and
SPSS wants to increase its piece of the pie. Until recently, ShowCase
software ran strictly on IBM AS/400's (it has recently been ported to
Windows NT). ShowCase also has a large installed base that can be leveraged.
In addition, both companies have overlap in specific vertical markets,
(retail, manufacturing, and consumer packaged goods). SPSS also concentrates
on telecommunications, healthcare, banking, finance, insurance, market
research, and the public sector. SPSS brings its extensive data mining
experience to the equation, and believes that there has been little penetration
of data mining technologies in the mid-market.
believes that the addition of ShowCase will strengthen its current analytical
CRM solution, CustomerCentric, by adding technology that extends the current
offering. This move may help SPSS compete more effectively with companies
like E.piphany and Broadbase, who, although smaller in size, have a strong
mind share among CRM customers.
Customers evaluating customer relationship management products (and who
isn't?) should look at SPSS' offering when it becomes available. Keep
in mind that this can't be before late 2001, (the acquisition isn't even
going to be completed until March 30 of next year). After the consolidation,
the companies will have to go through the standard merger pains (employee
attrition, merging of code bases, etc.). However, development has already
begun, and there is an agreement in place to integrate each other's technology
starting immediately. Given that some companies will not be willing to
wait that long, offerings from E.piphany, Broadbase, Quadstone and thinkAnalytics,
among others, should also be evaluated. The SAS Institute is also working
in this direction, although it is behind the development curve also.
SPSS is starting out from behind, it has a chance to end up in a strong
position. That's an important consideration for prospective customers
who may want to buy, so they can feel assured that the product can survive.
What SPSS will have to do is deliver the product according to the schedules
given out by its sales force, choose the correct vertical markets, and
- most importantly - develop a pricing schedule that appeals to the mid-market.
SPSS may just pull this off.