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IBM Betting Big on Business Analytics

ARMONK, N.Y. ( TheStreet) -- IBM (IBM - Get Report) is predicting that business analytics software will be one of 2010's hottest technologies, as companies attempt to squeeze as much value as possible out of their data.

"It's a market space that is growing substantially faster than other market areas," Steve Mills, IBM's senior vice president of software, told TheStreet. "Coming out of recession, hopefully, companies want to be more predictive."

Business analytics software is used to find new ways of analyzing data across a wide range of industries. This could be, for example, unearthing opportunities to cross-sell in retail, compiling health care data or performing risk analysis in finance.

IBM will unveil a slew of business analytics offerings at its Information on Demand conference in Las Vegas this week, including new software for analyzing sales, employee performance and procurement. Big Blue will also take the wraps off new content analysis software and technology for processing databases and emails.

Earlier this year, IBM spent $1.2 billion on business analytics software maker SPSS and threw down $5 billion to acquire Cognos in 2007.

IBM, which recently posted strong third-quarter results, has been one of tech's big success stories during the recession, thanks largely to its focus on high-margin areas such as software and services.

During the conference call to discuss the company's third-quarter results, IBM CFO Mark Loughridge vowed to pump profits into business analytics, which he described as a primary investment area. Since 2005, IBM has spent $9 billion on acquisitions to build its business analytics capabilities, and the technology looks set to account for a large chunk of the firm's $6 billion annual R&D budget.

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