IBM Buys SPSS for $1.2 billion

28 July 2009 at 11:05 am 12 comments

| Peter Klein |

Wow. “In acquiring SPSS, IBM said it was expanding its focus on business-analytics technology and services to meet a growing client need to cut costs. According to IDC estimates, the world-wide market for business analytics software will grow by 4% to $25 billion this year.” SPSS must be the most valuable product ever created by a political science professor. (I may or may not mean just monetary value.) HT: Cliff.

Entry filed under: - Klein -, Ephemera.

The Newest Demotivator Plus ça change. . .

12 Comments Add your own

  • 1. Cliff Grammich  |  28 July 2009 at 11:54 am

    I took a few classes with Nie at Chicago, where (surprise, surprise) I learned SPSS. While Peter’s point about SPSS, a program I still use, being the most valuable product ever created by a political science professor is well-taken, I’m also reminded of Michael Jordan’s status as the highest-paid geography major of all-time.

    When it came time to apply for grad school, I asked Nie to write me letters of recommendation. He kindly invited me to discuss my interests with him at his SPSS office at the northeast corner of the 30th floor of 444 N. Michigan Ave. on a spectacular autumn day with views to the north and east including of the Gold Coast and perhaps three-fourths of Lake Michigan and surrounding shoreline. At one point, discussing his vocation as a scholar, Nie gestured around the office and said, “this is only a hobby for me.” I took another gander–more likely gawk–at the surroundings and said, “It looks like it sure beats the hell out of stamp collecting.” He smirked–and, apparently, still wrote a favorable letter. (I was accepted at both programs to which I applied.)

    For the record, suffice it to say the work surrounding my dissertation was not, apparently, as ultimately profitable as the work surrounding his . . .

  • 2. Cliff Grammich  |  28 July 2009 at 12:07 pm

    BTW, Peter, the HT should probably go to Twitter, where I saw SPSS was “trending” (which elicited a “what the . . .” reaction from me).

  • 3. Peter Klein  |  28 July 2009 at 12:59 pm

    Cliff, I can’t top your “hobby” anecdote, but David Teece, who according to the WSJ has made about $50 million in consulting fees and currently holds a 7% stake in LECG, was on my dissertation committee. I did meet him once at his home office, where I used the side entrance, was greeted by an assistant, served coffee as I waited, etc. He was very helpful, which is remarkable, given the opportunity cost of his time.

  • 4. David  |  28 July 2009 at 7:47 pm

    Come now, SPSS is for sissies. Real men use SAS while the cool kids have moved on to STATA.

  • 5. Cliff Grammich  |  28 July 2009 at 9:00 pm

    David, you mean you aren’t geeky enough for R?

  • 6. Cliff Grammich  |  28 July 2009 at 10:43 pm

    Peter, something else I just remembered that you might like about Norman Nie: he advocated booting all judges on retention ballots in seminars and other discussions that I had with him. As a much-too-earnest 20-something, I argued about this quite extensively with him. He wouldn’t give an inch; maybe that kind of certitude helped him carve his niche in the (non-academic) market. Years later, I was finally convinced he was right and now can’t recall the last time I voted to retain a judge. I know you’d consider that imperfect behavior still, but I may just need more time to digest all the wild and crazy ideas of those radical professors of entrepreneurialism . . .

  • 7. Rafe Champion  |  29 July 2009 at 5:30 am

    No doubt the technology has moved on but not before SPSS achieved the kind of image that Hoover established among vacuum cleaners.

  • 8. Cliff Grammich  |  29 July 2009 at 7:13 am

    I wonder if David (who is right to note a hierarchy here) and one of Peter’s Facebook commenters (who speculated about what this means for buyers with academic needs) are on to a “markets” question here that I’m not smart enough to answer or probably even to ask clearly.

    As I recall, Nie didn’t create a completely new product with SPSS. Rather, he thought statistical programs (BMDP?) then extant didn’t meet his specific needs. Then, as noted in the Wikipedia article Peter cites, he incorporated primarily to serve an overwhelming demand from users with similar needs.

    Now I wonder if we’ve come full-circle. When I have a question I don’t know how to answer with SPSS, I ask the smartest statistician I know, who kindly explains how to answer it with SPSS but ends his answer by encouraging me to continue my practice with R, an open-source program. And, as clunky as I sometimes find it, he’s right that R is the better program to answer the arcane question I asked.

    So, have we come full-circle on these things? Put another way, does the sale of SPSS to IBM mean the end of its days as a “serious” program for social scientists (but flossier days for it in the business analytics market)? Does it really mean nothing for meeting the needs of social scientists not only because of the existence of SAS and Stata but also because of the open-source R?

  • 9. Warren Miller  |  29 July 2009 at 1:44 pm

    I’ve endured the SPSS rip-off. I faced a big-time statistics project back in 2006, had heard about SPSS being aimed somewhat at the business market, and went for it. Big mistake. It’s about as user-friendly as my ex-wife’s lawyer. Rather than endure asking interminable questions of the very helpful and highly knowledgeable support people @ SPSS, I hired a graduate student for 50 bucks an hour. He used R to do what our client needed to have done, and then made Excel stand on its head and whistle Dixie with solver tables and that kind of thing. The client company, whose stock was traded on the AmEx, was bedazzled and avoided a very big lawsuit because of what my graduate student subcontractor was able to do.

    I have since heard wonderful things about STATA from colleagues in the business community. From an opportunity cost standpoint, however, methinks the grad student is the way to fly. The guy was from Armenia, had a compelling personal story as a Franklinesque troublemaker, and was a great colleague, to boot. And he needed the money. It was he who suggested the $50 hourly tariff. I wrote him a bonus check at the end of the project for the superb work he did. He tried to refuse it, but I wouldn’t let him. Now I’m a permanent fixture on his Christmas card list. Win-win.

    Perhaps IBM will do for SPSS when it has done for Lotus Notes. We’re a Notes shop and absolutely love it.

    Peter, you know the truth of what I’m about to say, but David Teece must be an unbelievable guy. I’ve never met him, but I’ve read his papers for over 25 years and also followed his career @ LECG, of which he was the chairman for quite a few years. I have a close colleague in Philadelphia who was thick as thieves with Teece when they were neighbors at one point, and my colleague just can’t say enough good things about the guy. I wish he (Teece, not the colleague!) wrote more.

    Wow. Having Teece and O. Williamson on your committee. That’s really something, man, really, really something. We should all be so fortunate.

  • 10. Peter Klein  |  29 July 2009 at 2:26 pm

    Yes, Williamson and Teece are among the most important minor pre-Kleinians. ;-)

  • 11. Cliff Grammich  |  30 July 2009 at 7:24 am

    Warren, are you saying the answer is in the labor rather than the tools? Where’s the fun in that?;)

  • 12. Richard Henderson  |  4 August 2009 at 11:06 am

    I have to second what Warren said about David Teece. I’ve worked for him for several years, and I don’t know anyone more personable and likable. Not everyone at Berkeley is like that.

    Some of you may be interested in a website I prepared about his research: , especially the overview of research and key research topics in .

    I doubt that I will ever again work on a website with such rich content.

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