IBM Sees Big Market in Making Cities Safer with i2 Acquisition
IBM (NYSE:IBM) recently announced a definitive agreement to acquire i2, a UK based leading provider of intelligence analytics for crime and fraud prevention, to accelerate its business analytics initiatives and help clients in the public and private sectors address crime, fraud and security threats. i2 will be integrated into IBM’s Software Group, which is a key driver of growth and profitability for the company. [1]
We estimate that IBM’s Software business (including Middleware Software and OS & Others) accounts for nearly 45% of our $200 Trefis price estimate for IBM. This is around 20% ahead of the current market price.
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In its press release, IBM cited FBI statistics for huge crime and theft rates in the US [2] indicating the strategic importance of fraud and security threat reduction across all industries.
The recent acquisition will enable IBM to help clients harness the ‘big data’ – information and intelligence coming from disparate and unstructured sources including social media, biometrics and criminal databases – using i2’s intelligence analysis and tactical lead generation capabilities, which help cities, nations, international bodies and private enterprises combat fraud and security threats.
i2 has more than 4,500 customers in 150 countries with clients spanning multiple sectors globally such as banking, defense, health care, insurance, law enforcement, national security and retail. i2 solutions are currently used by 12 of the top 20 retail banks globally and eight of the top 10 largest companies in the world.
IBM Continues to Leverage its Smarter Planet Campaign
The acquisition is part of the IBM’s Smarter Cities initiative – a subset of its ongoing “Smarter Planet” campaign – to better equip public safety officials and businesses with the information and tools they need to ensure safer cities and the privacy and safety of citizens, businesses and governments.
IBM identifies Smarter Planet as one of its prime focus areas, along with business analytics, Cloud computing and growth markets and in recent times has made number of acquisitions to launch a variety of new services. (See IBM Smells Opportunity in CRM with Launch of Smarter Commerce Initiatives) (See IBM Focuses on Smarter Buildings with TRIRIGA Acquisition)
Notes:- IBM to Acquire i2 to Accelerate Big Data Analytics to Transform Global Cities, IBM [↩]
- According to FBI statistics, in 2009 there were 1.3 million violent crimes, 9.3 million property crimes and 6.3 million larceny/thefts in the United States. Consumer-facing fraud for retailers alone costs $100 billion a year in the United States. [↩]