IBM Closes DemandTec Deal, Revs Up Smarter Commerce

IBM wrapped up its $440 million acquisition of DemandTec, a developer of cloud-based sales and marketing analysis applications, in a move aimed at furthering IBM's Smarter Commerce initiative.

IBM and DemandTec revealed the acquisition plans in December.

DemandTec's on-demand software is used by businesses to analyze marketing and merchandising data, helping them develop the best price points and product mixes based on online and in-store customer buying trends.

DemandTec's customers include retailers such as grocery store operators, drug store chains, office supply retailers and clothing stores; and manufacturers of consumer packaged goods. Best Buy, Petco, The Home Depot and Target are among the software's users.

IBM launched its Smarter Commerce initiative last year, targeting a potential software market the company estimates to be worth $20 billion a year.

Earlier this month IBM completed its acquisition of Emptoris, a developer of supply chain analysis applications that also will be added to the Smarter Commerce effort. The cost of that acquisition was not disclosed.

For the channel IBM has developed partner certifications and e-commerce consulting services around its 2010 acquisitions of e-commerce software vendor Sterling Commerce ($1.4 billion), interactive marketing application developer Unica ($480 million) and Web analytics software vendor Coremetrics (acquisition price undisclosed).

Last year IBM also began offering resellers up to 50 points of margin for selling Smarter Commerce software to midmarket customers under the IBM Software Value Plus program.

DemandTec, San Mateo, Calif., will be integrated into IBM's Software Group.