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New Study Projects Robust Growth for Predictive Analytics Software
Confirms Predictive Analytics as New Distinct Sector
Source: www.spss.com
Copyright SPSS, Inc. 2004
01/25/05

This is a dated announcement. The material in this announcement could be superceded by more current announcements.

SPSS continues distributing Hyperion Analyzer and Hyperion Essbase as part of its ShowCase® Suite

CHICAGO, 01/25/05 — The predictive analytics software sector is quickly coming into its own, according to a new study(1) from the leading analyst firm IDC. IDC (http://www.idc.com/) projects that the sector will grow at a compound annual growth rate of 8 percent during the next five years. The new IDC study confirms the emergence of predictive analytics as a distinct software sector.

The IDC study specifically establishes a definition and segmentation of end-user business analytics software into core and predictive analytics. "The growth in end-user business analytics in both revenue and importance demands a refinement in the definition of analytics," the study states. The study provides a five-year growth forecast for total core and predictive analytics software for 2004-2008.

IDC defines predictive analytics software to "include all analytics, both tools and packaged applications, more complex in their mathematics than core analytics."

"Predictive analytics are used to determine the probable future outcome of an event or the likelihood of a current state where it is unknown," the study continues. "These analytics include data mining, clustering, decision trees, market basket analysis, regression modeling, neural nets, genetic algorithms, text mining, hypothesis testing, decision analytics, and so on."

"Both facets of analytics are equally important," notes Robert Blumstein, IDC Research Director, CRM Analytics and Marketing Applications, "and understanding them is fundamental for maintaining a strategic view." The study projects that "core and predictive analytics will continue to grow in importance as companies seek to democratize and standardize their decision making. Users will adopt the technologies on an as-needed basis, typically to address specific analytic problems such as corporate planning or broad company issues such as optimized pricing across a distributed sales force."

Jack Noonan, the President and CEO of SPSS Inc. (NASDAQ: SPSS), a worldwide leader of predictive analytics software, said he was not surprised by IDC's new findings. "SPSS software is becoming increasingly integral to the most critical strategic operations of Fortune 1000 companies worldwide. The software is not just helping drive these operations but is also producing high returns on investment (ROI)."

IDC, in a separate assessment, has found that business applications involving predictive analytics software generate an average ROI of 145 percent(2), much higher than that for other business analytical software.

1 Source: Worldwide End-User Business Analytics 2004-2008 Forecast: Core Versus Predictive, IDC # 32642, December 2004

2 Source: Predictive Analytics and ROI: Lessons from IDC's Financial Impact Study, IDC #30080, September 2003