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IBM Adds Analytics to Data Center Services to Win Contracts

Dec. 6 (Bloomberg) -- International Business Machines Corp., the world’s biggest computer-service provider, is adding analytics to its information-technology services to attract more customers and spur sales in its largest division.

The company will use analytics to predict clients’ long-term costs of running different computer systems, Steve Sams, IBM’s head of data center services, said in an interview last week. Sams will make the announcement today at the Gartner Data Center Conference in Las Vegas.

Signings for services, which make up almost 60 percent of the company’s total revenue, have slipped for three straight quarters as companies put off spending on larger projects. The analytics will help IBM win contracts by demonstrating cost savings of its technology and help current customers to determine where to invest in data centers, Sams said.

“Their budgets clearly are not going up -- if anything, they’re flat or going down,” Sams said of customers. “They’re finding it increasingly challenging to keep up with changes.”

The new analytics show clients how much it would cost to invest in various technologies -- consolidating data centers or upgrading servers, for example -- and how that would impact long-term costs, such as power consumption, space requirements and future upgrades, Sams said.

IBM, based in Armonk, New York, has invested more than $14 billion in analytics acquisitions, including last year’s $1.2 billion purchase of SPSS Inc., as it bets the ability to predict trends will help clients save money and boost sales. Analytics software and services will add about $16 billion to IBM’s revenue by 2015, the company said in May.

To contact the reporter on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net.

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