Humana Bolsters Care Management Capabilities with Acquisition of SeniorBridge

Humana announced an agreement this past week to acquire SeniorBridge, a New York-based provider of in-home care services to the chronic care and senior populations. The acquisition marks the latest example of Humana’s attempt to position itself as a more retail-focused company through a series of acquisitions and strategic initiatives.

Over the past eleven years, SeniorBridge has established itself as a leader in managing complex chronic conditions for seniors in the self-pay (or private-pay) market. Through the acquisition, Humana will be presented with a host of opportunities to leverage SeniorBridge’s model across a broader market base:

• Medicare – upon receipt of Medicare certification, Humana will be able to leverage SeniorBridge’s suite of care management capabilities across its nearly 2 million Medicare plan members.
• Humana Cares – SeniorBridge bolsters the Humana Cares segment of the company, which provides on-the-ground care management services to over 185,000 chronically ill plan members. The Humana Cares segment of the company has been vital to Humana’s emergence as a leader in the Medicare Advantage Special Needs Plan (MA-SNP) market.
• Other Payer Groups – several reform related initiatives, such as reimbursement reform and medical loss ratios, have positioned in-home care to be a large growth area for SeniorBridge given its significance to payers as a cost-saving tool (managed care has traditionally only contributed to a small portion of SeniorBridge’s overall business).

Humana has been among the most progressive payers in promoting member self-management and wellness through a number of initiatives, including:

• Humana Guidance Centers – “store-front” hubs located in select cities provide members with access to a suite of wellness and self-management products.
• Remote Medical Monitoring – provides real-time condition monitoring solutions to help address member health challenges in real-time.
• Humana Center for Health & Well-being – Humana’s LifeSynch subsidiary provides face-to-face health coaching resources to plan members. In addition, the Company has established a partnership with MinuteClinic to provide quick-access to routine treatments.

In addition, Humana’s recent acquisition of Concentra, along with several urgent care clinics from NextCare, signaled their entrance into the provider marketplace. These strategic moves have provided Humana with a mechanism to execute on their strategy to become more consumer-facing and the flexibility to adapt to some of the new realities established through health reform as they are implemented over the next few years.

Other recent investment activity in the payer marketplace signals that Humana might not be alone in their efforts to diversify and establish an “on-the-ground” presence (for example, UnitedHealth’s purchase of Inspiris, BlueCross Blue Shield of Florida’s investment in CareCentrix).  Payers appear to have realized the disconnect that has existed historically between themselves and their customer base. Given the “bets” that payers have made across the landscape, it is clear that payers are seeking to re-orient themselves around the consumer and provide consumers with an opportunity to take a greater role in controlling their healthcare. While a variety of strategies are being used, payers have been prioritizing investments and services around the “consumer experience” to increase overall access and transparency.

Let us know what you think.

Joe Long

Joe Long is an analyst at TripleTree covering the healthcare sector, with a focus on the approaches and technologies surrounding health insurance exchanges.  You can email him at jlong@triple-tree.com.

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“Incubation Phase” of Federal Contractors in Health Care Now in Rearview Mirror

National defense spending is facing headwinds as the Department of Defense controller predicts the national defense budget to decline from its current level of $740 billion to $700 billion in 2012; and $650 billion in 2013.

For defense contractors reliant on this spending, TripleTree expects a continued focus on vertical expansion to intensify as early adopters expand on their existing footprints and late-comers feel the pressure to aggressively stimulate growth at any cost.

We predict that 2012 will be an active year in federal healthcare M&A because of four factors:

• Military deployment drawdown and DoD budget cuts
• Documented success of early healthcare initiative adopters
• Fear of stockholder retribution by late-movers
• Looming 2013 healthcare initiative deadlines mandated by the Affordable Care Act.

With that in mind, large contractors continue to trumpet new healthcare initiatives, redirect strategy teams, appoint new management, and realign spending priorities. Recent announcements underscore the trend:

• CGI Group will record health care revenue as a separate vertical segment going forward. Behind this move was strong historical performance ($350 million in annual revenue), high growth (3 year healthcare CAGR of 28.1% vs. 5.3% for CGI), and strategic importance (order backlog of more than $1.2 billion)
• USIS will form a healthcare solutions group providing fraud, waste, & abuse services targeting the federal market. The move reflects a strategic departure from its traditional business providing background investigations and screenings
• Harris Corporation was awarded over a quarter of a billion dollars of healthcare contracts in the past 45 days – healthcare is part of the company’s fastest growing business segment
• CACI International President & CEO Paul Cofoni announced on the heels of winning four HCIT contract awards worth a cumulative $69 million that “transformative healthcare IT solutions and services … are key components of our future growth strategy”
• Pure play defense & IT contractors continue to woefully underperform their diversifying peers – Raytheon lowered its sales forecast by $500 million to $1 billion

Last quarter we predicted M&A activity would be carried on the backs of public asset divestitures, private equity platform transactions, and contract vehicle access acquisitions, or “golden tickets”. To that point, in the past three months we have seen a handful of corporate divestitures, including the spinout of SRA’s CRO division to biopharmaceutical company Aptiv Solutions. We’ve also watched as a near-record number of small government vendor acquisitions have occurred (71 last year, the highest since 2000), and at least one “golden ticket” transaction went down (ManTech’s $90 million purchase of Worldwide Information Network Systems, a cyber IT provider). Last week, consulting firm Grant Thornton acquired Computer Technology Associates’ Health Solutions division, expanding its healthcare and public sector presence with five military healthcare contracts.

Healthcare is not a sector that lends itself to being understood swiftly and easily and much of the hesitation from non-traditional global acquirers in diversifying into healthcare stems from this lack of familiarity. Contractor expansion into the healthcare vertical has been slower and more deliberate than peer verticals like cyber security and intelligence. We believe that contractor healthcare strategy teams are nearing the end of their incubation periods and once committed to healthcare, their business models and-go-to market approaches will be fully baked. Federal contractor healthcare initiatives will be key area of our research agenda and advisory focus in the quarters ahead, and we’ll opine often on developments…until then, let us know what you think.

Marc Baudry

Marc Baudry is an analyst at TripleTree covering the healthcare industry specializing in government health, population health management, informatics, and facility-based services. Follow Marc on Twitter or email him at mbaudry@triple-tree.com.

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Medicare Advantage…Here Today, Here Tomorrow…

CIGNA put a stake in the ground for the long term prospects of Medicare Advantage (M.A.) with its recent announcement that it would be acquiring HealthSpring for $3.8B (a 37% premium over its closing price prior to announcement).

HealthSpring primarily operates as a M.A. plan covering over 340K lives across 11 states (including over 800,000 Medicare Part D members).  CIGNA previously had a very limited presence in M.A. with ~44,000 lives entirely in Arizona.

CIGNA has been focused on diversifying its core US healthcare presence, so the move isn’t too much of a shocker, although many thought its approach would include international expansion versus a bold move into the government market.  It’s likely the HealthSpring business model was too alluring for CIGNA to pass on when you consider HealthSpring’s:

• Tight integration with network physicians including a high level of capitation and risk sharing;
• Strong leadership team lead by Herb Fritch whom possess the experience and know-how to operate a unique, physician-centric, coordinated care model; and
• Consumer brand presence within the senior market.

There is a large opportunity for CIGNA to leverage and replicate HealthSpring’s coordinated care model across their commercial book of business to drive efficiencies and deliver better care.  Additionally, CIGNA will benefit from its ability to cross-sell HealthSpring into new markets.

CIGNA is not the only health plan making moves in the M.A. market – recent M&A activity within the sector over the past 18 months include:

• Wellpoint – CareMore (2011)
• Aetna – Genworth’s Medicare Supplement (2011)
• Humana – MD Care (2011) and Arcadian Management Services (2011)
• HealthSpring – Bravo Health (2010)

HealthSpring was one of the few remaining M.A. plans with size and scale, and CIGNA’s move could prompt additional consolidation within the sector over the coming 12-18 months.  The list of targets with viable M.A. populations (100K+ lives) is becoming quite limited.  Some of these include Universal American and Wellcare, public M.A. plans with 100K+ lives; and XL Health, SCAN, Aveta and Universal Healthcare as examples of private M.A. plans with scale.

There have been recent headlines about increased pressure on reimbursement rates and minimum medical loss ratio (“MLR”) requirements posing a threat to the future of M.A.  My view, however, is that M.A. will not only survive, but thrive going forward and recent M&A activity would suggest the same.  Let me know what you think.

Judd Stevens

Judd Stevens is an associate at TripleTree covering the healthcare industry, specializing in the impacts and transformation of health plans in a post-reform world.  Follow Judd on Twitter or e-mail him at jstevens@triple-tree.com.

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TripleTree, LLC Advises Connextions in Sale to OptumHealth

Year to date, we’ve used the tag “consumerism” several times to reference innovation and consolidation where health care payers and providers are yielding control to consumers regarding more control in healthcare decision making.

TripleTree research is often brought to life through our deal flow, and we were pleased last week to announce that our client Connextions, announced its acquisition by OptumHealth – a seminal illustration of why consumerism in healthcare is so relevant.

Click here to read the full press release.

Carriers, providers, employers and other healthcare stakeholders are realizing that optimizing customer experience needs to become a critical component to their service delivery platforms.

The Connextions platform and use of analytics around member behaviors have created a unique acquisition, retention and up-sell platform for top carriers in the U.S., and a growing number of public and private hosts of insurance exchanges.

Click here to learn more about TripleTree’s perspectives on the impacts of consumerism and look for future research from our team on Seniors, Informatics, ACOs, Consumer Engagement and Social Media – all topics where consumerism is a key undercurrent.

Have a great week!

Chris Hoffmann

Chris Hoffmann is a Senior Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

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Big Defense Contractors Take Aim at Healthcare

The U.S. Defense Department budget experienced a $2+ trillion surge from 1998 to 2010 and was the primary driver behind the growth and sky rocketing valuations of “defense IT” contractors over the same period. Government contractor M&A activity and valuations peaked in 2007 and have since stalled pending government budget cuts and evolving spending priorities. Despite the slowdown, recent indications are that M&A activity in the sector is roaring back – here’s why:

Facing stagnant growth in their core industry, recessionary pressures, and shareholder demands for higher revenue and earnings, defense IT contractors are increasingly exploring non-traditional avenues for growth. Unlike defense spending which faces the specter of spending cuts for the next several years, U.S. federal government healthcare spending has its own projections set now at $985 billion this year, with growth only accelerating. These combined factors have led leading industry players such as CACI, CSC, and General Dynamics to see healthcare as a major opportunity for growth and a strategic imperative going forward.  Financial sponsors are becoming acquisitive too – consider the following deals:

• NCI acquired AdvanceMed for $62 million
• Vangent acquired Buccaneer Computer Systems for $70 million
• Smartronix acquired HIE firm Cogon Systems for an undisclosed amount
• SRA International acquired by Providence Equity for $1.9 billion
• Global Defense Technology and Systems acquired by Ares Management for $315 million
• General Atlantic Partners and KKR purchased TASC from Northrop Grumman for $1.65 billion
• Veritas Capital purchased the Enterprise Integration Group from Lockheed Martin for $815 million

We believe that as comfort with the changing dynamics of the federal budget and healthcare reform grows in the new post-recession environment, strategic defense and IT contractor interest fueled by cash war chests and shareholder demands will drive premium market valuations. Reuters recently announced that Veritas Capital government HCIT portfolio company Vangent has entered a process with valuation expectations north of $1 billion and significant early interest from private equity and strategic buyers.

At the same time, cross-aisle matchmaking between commercial and government healthcare players (CSC’s acquisition of iSoft Group for $188m; Harris’ acquisition of Carefx for $155m; and UnitedHealth Group’s acquisition of federal medical evaluation provider Logistics Health Inc) is being supported beyond the increasing federal involvement in healthcare. UnitedHealth Group has taken an early leadership role with respect to diversifying beyond TRICARE and we expect other payer groups to follow. Some of the macro forces we see driving growing commercial-government convergence are:

• Fewer single department or one-of-a-kind government systems and solutions
• Technology upgrades are prevalent for cost-cutting purposes and streamlined workflows
• Growing mindset around collaboration between governmental agencies
• Diversification between stable government revenue and higher-margin commercial revenue

Despite the heydays of the defense spending boom being over, the government IT/services M&A market is showing it can still generate billion dollar deal flow. With existing industry players doubling down on their investments, new entrants (including financial sponsors) will continue to pursue and capitalize on undervalued assets. Let us know what you think.

Marc Baudry

Marc Baudry is an analyst at TripleTree covering the healthcare industry specializing in government healthcare services, population health management and informatics. Follow Marc on Twitter or email him at mbaudry@triple-tree.com.

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Ingenix Sells Clinical Development Outsourcing Business to Focus on the Safety and Effectiveness of Drugs and Devices

This morning, inVentiv Health announced that it will acquire Ingenix’s clinical development outsourcing business. According to press releases from both organizations the proposed transaction covers “businesses that generate approximately $400 million in annual gross revenue” and business units being acquired by inVentiv Health will retain the i3 brand name.

This is a bold move for inVentiv Health, which was taken private in August of 2010 by Thomas H. Lee Partners. Previously known more for its sales and marketing-related services to the life sciences industry than its clinical services, inVentiv Health now becomes a major player in the contract research organization (CRO) market. As part of inVentiv Health, i3 will continue to be led by CEO, Glenn Bilawsky, a CRO industry veteran with a proven track record of driving growth and innovation.

Now that inVentiv Health has a broad and deep portfolio of assets across the clinical and post-marketing life sciences services market, the most intriguing part of this transaction will be to see how and if inVentiv Health can integrate these different service lines and whether they will be able to successfully leverage customer relationships that both companies have in their respective businesses today to drive additional revenue. Historically, the sales and marketing teams in life sciences companies have had very little interaction with research and development, so it will be interesting to see if inVentiv Health is able to create new types of services that drive more collaboration across their clients’ operations and ultimately lead to better life sciences products.

From the Ingenix standpoint, this transaction is a clear illustration of the increased focus healthcare payers and providers are placing on health outcomes and comparative effectiveness of life sciences products. The remaining assets from i3 that are not being sold to inVentiv Health, including the Innovus, Quality Metric, Pharma Informatics, and Drug Safety/Epidemiology business units, and the CanReg and ChinaGate Regulatory Consulting businesses will be part of a newly-formed Ingenix Life Sciences division. According to a press release from Ingenix, these units “offer global solutions for evaluating health economics outcomes and late phase research, market access and reimbursement, data and informatics services, epidemiology and drug safety, patient-reported outcomes and regulatory consulting.”

With more and more blockbuster drugs going off patent and the economic pressures being felt across the healthcare industry, life sciences manufacturers can no longer rely on large marketing budgets to drive demand for their products. Healthcare payers have become much more selective in the products they will reimburse and have sponsored outcomes studies and comparative effectiveness research to help determine which care regimens create the highest return on investment. Additionally, with additional reimbursement risk being shifted to providers as a result of healthcare reform, physicians are and will continue to seek out products that will create the best outcomes for the lowest costs. These dynamics are clearly the impetus behind today’s announcement from Ingenix.

For now, we’ll continue to monitor this deal and new emerging ramifications of this deal on the sector…we’d be interested to know what you think.

Have a great week!

Jason Grais

Jason Grais is a Director at TripleTree covering the healthcare industry specializing in healthcare IT, population health management and emerging services in the life sciences sector. You can email him at jgrais@triple-tree.com

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Rationalizing Clinical Analytics in Healthcare IT

Innovative and complex technologies are rapidly gaining market traction, but are far from ubiquitous across U.S. hospitals.  For instance, why can credit card companies proactively call, email, and text customers within minutes of potential fraud on their accounts, but hospitals don’t use the same types of analytics to provide patients with better, and in some cases life-saving care?

The answers to these questions are not simple, but we’ve grouped them into four themes:

• The systems, or lack thereof, in place at hospitals historically did not provide adequate interoperability;
• Hospitals have prioritized expensive electronic medical record (EMR) deployments and revenue cycle management solutions ahead of clinical analytics platforms and have not had budget dollars to allocate to additional projects given cost constraints;
• Clinicians have not been educated and trained to use these type of tools and, aside from early adopters, are reluctant to change;
• There are not enough incentives in place for hospitals to change how they operate in order to improve care.

Hopefully these excuses will dissipate as modern clinical and administrative systems are deployed, clinicians realize the power of analytics, and incentives change across the healthcare landscape.  Chart reviews and significant human intervention with patients will still be prevalent, but clinical surveillance analytics will be additive platforms for improving patient care.  As hospitals complete the initial phases of their EMR deployments and have time to focus on harnessing their data to improve care, the market for clinical analytics will grow quickly.

Last week, Wolters Kluwer acquired Pharmacy OneSource (Disclosure: TripleTree was the exclusive advisor to Pharmacy OneSource on the deal).  The flagship application provided by Pharmacy OneSource is Sentri7®, a unique solution in an emerging market for clinical surveillance.  Sentri7 is a software-as-a-service (SaaS) application that receives data feeds from various hospital systems, such as EMR, admissions and demographics, nursing, laboratory, radiology, and pharmacy.  The system analyzes data feeds real-time against business rules (configured by hospital clinicians) which identify opportunities for clinicians to intervene and improve patient care.  A harbinger of where this market will evolve, Sentri7 can:

• Identify patients with complex medical conditions that are being overlooked,
• Warn of early signs of sepsis,
• Remind clinicians if evidence-based guidelines are not being followed,
• And ensure the appropriate drugs are being administered to patients.

To be successful in this market, systems must be flexible, easy to use and seamlessly integrate into a clinicians’ workflow.  While EMR systems from the likes of Epic and Cerner can be programmed to mine data, they lack the architectural flexibility offered by clinical surveillance tools like Sentri7 which will become table stakes as the expectations of clinicians evolve.  Hospital IT departments are already over-burdened and adding development and maintenance of analytics business rules to their purview is not practical.

As the interoperability of healthcare data continues to expand, health information exchanges will enable analytics across regional hospital systems, surgery centers and standalone clinics.   We expect automated analytical tools to continue to proliferate across all areas of healthcare and related to clinical analytics within the hospital, surveillance is just the beginning.

Let us know what you think. Thanks and have a great week!

Jason Grais

Jason Grais is a Director at TripleTree covering the healthcare industry specializing in healthcare IT, population health management and emerging services in the life sciences sector. You can email him at jgrais@triple-tree.com

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Wellness Now a Key Theme to the Healthcare Landscape Dialogue

Proactive preventive care is increasingly seen as a viable and in many cases necessary substitute to traditional reactive health care. Preventative offerings and wellness programs (including biometric screenings, care intervention, and health risk assessments) offer lower costs by addressing health issues prior to medical incidents, rather than after.

This psychological shift in our healthcare thinking has evolved around mounting healthcare costs and began entering consumer consciousness once it became apparent that we (the consumers) may soon be bearing more of our own healthcare costs.   Trends around wellness programs have shifted to a keen focus correlating healthy behavior and healthcare outcomes – all told, a broad societal “awareness shift” of the health effects of our individual behaviors.

Politicians and capital markets are taking note:

• Chicago mayoral candidate Rahm Emanuel’s recently announced that if elected he intends to implement an incentive-laden health and wellness plan for city employees projected to save Chicago $240 million over 4 years.
• 2010 saw numerous payer acquisitions of wellness companies, including OptumHealth’s acquisition of Wellness Inc., Humana’s acquisition of Hummingbird Coaching, and CIGNA’s purchase of Kronos Optimal Health, and, to name a few.

Much of this M&A activity has been driven by changing market regulations and broad government support. The Accountable Care Act of 2010 included many health and wellness provisions, including a potentially game changing provision altering prior HIPAA regulations. This provision raises the wellness incentives ceiling from 20% to 30% of the employee-only coverage portion of the plan (and includes the possibility of raising it to 50% pending review). The U.S. Department of Health and Human Services’ recently announced Healthy People 2020, a roadmap for public health and wellness that requires significant investment and utilization of wellness programs as a core component of national health goals.

This wave of public adoption is a key validation for “wellness,” a long-time healthcare “trend” that is now becoming a central theme in the broader healthcare dialogue.

Next steps? Continuing the momentum of wellness themes into effective wellness programs that capture meaningful participation from employees.

• While many U.S. employers currently offer some type of incentives, (56% according to the latest wellness survey by Buck Consultants, driving measurable wellness results means offering substantial incentives that drive meaningful participation.  Without incentives, participation in wellness programs, regardless of offerings, typically falls in an anemic range of 20-30% that fails to include the most at-risk members who are responsible for driving the majority of healthcare costs.
• Meaningful incentives drive participation increases of three to fourfold, bringing participation to 80-90% of those eligible, including engaging the top at-risk employee segment. This is a substantive increase and one that promises to shape the evolution of future wellness programs.

Our growing spate of advisory work and broadening research agenda underscore that preventative care and wellness programs are more relevant than ever. As we assess the landscape of wellness vendors, we’re most impressed by those firms pairing well-designed wellness platforms with go-to-market strategies that creatively leverage the incentives supported by health reform, and onboarding models that garner consumer/employee engagement.

Our research team is working on two reports that include “wellness” as a central theme; a Q1’11 publication focused on the Senior’s market, and a Q2’11 publication focused on healthcare informatics.  In addition, the 6^th annual Wireless-Life Sciences Alliance Convergence Summit will explore compliance, chronic care and a host of other wellness related topics.

Let us know if you’re interested in learning more, and have a great week!

Marc Baudry

Marc Baudry is an analyst at TripleTree covering the healthcare industry specializing in population health management and healthcare informatics. Follow Marc on Twitter or email him at mbaudry@triple-tree.com.

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Far Reaching Implications Likely With FTC’s “Do Not Track” Proposal

The FTC’s recently proposed “Do Not Track” initiative is example of a larger movement within the regulatory space. The increase in regulation – be it the recent push for a web privacy “Bill of Rights”, the FTC becoming every involved in net neutrality, the oversight of the FDA on new mHealth applications, or HIPAA’s increased relevance as we move to universal electronic medical records (EMRs) in the coming years – is being followed by a subsequent explosion in governance, risk, and compliance (GRC) activity.

There are two themes to take away from this:

• The GRC and security sectors will become more popular amongst investors
• The old adage, “knowledge is power” is even more true now that user-centric data is paramount to business analytics, business intelligence, and a key competitive advantage for firms

The effects of these themes are beginning to unfold in the market already, even before some of this potential regulation is signed into law.

User-centric data accumulates quickly and must be stored in large data warehouses. This leads to investors oftentimes branding companies like 3Par (with complex data storage programs) as “marketplace darlings”. Data storage is a building block for cloud computing and vendors offering these solutions will increasingly be seen as valued assets; consider the following:

• Dell just acquired Compellent for $960m or 6.5x revenue, a move that again underscores strong valuations for storage software firms
• A recent PCWorld articled noted that data center server capacity is more than doubling every 24 months

In addition, security is a top concern for user-centric data storage. Market growth and opportunity among security focused vendors is equally robust:

• Intel’s purchase of McAfee for $6.8 billion or 3.4x revenue shows potentially high multiples for security companies
• Social sites like Facebook are increasing security controls for user data in the wake of exposed data leaks
• Because of WikiLeaks, the US Department of Defense banned users from possessing flash drives and CDs while on premise in secured network facilities

The growing emphasis by vendors on verticals solutions makes this an even bigger topic – a single failure point or overlooked compliance metric can lead to massive sector-centric data leaks, as the very recent attack against entertainment website Gawker shows (millions of users personal information was exposed to the web).

Our ongoing research and advisory work across the GRC and data storage spaces allows us to keep abreast of market movements and trends to provide thoughtful insight to our clients. If you’re interested in learning more, or have some perspectives to offer – we’d love to hear from you.

Have a great week.

Adam Link

Adam Link is an analyst at TripleTree covering healthcare delivery models, specializing in software and wireless health.  Follow Adam on Twitter at AdamJLink or email him at alink@triple-tree.com.

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An Acute Focus on the CFO is Feeding IBM’s Appetite for Analytics – 10/27/10

Last week, IBM expanded upon its business analytics and optimization strategies by acquiring Clarity Systems, a Toronto-based software vendor principally focused on Corporate Performance Management (CPM) and regulatory compliance functions for the CFO’s office.

This acquisition in conjunction with IBM’s recently announced acquisition of OpenPages reaffirms several reoccurring trends by Big Blue and possibly sets in motion other market dynamics:

• Since IBM’s announcement in May, the global technology company has been busily executing its plans to invest $20 billion by 2015 in an acquisition strategy that shift its focus into higher value segments.  The anticipated volume of acquisition activity would double the pace of the preceding five years.  Having utilized around $5 billion of acquisition capital to-date, IBM appears well on track to its 2015 goal.
• IBM’s interest in business analytics & optimization, principally led by acquisitions made by IBM’s Software Group, will continue to be a primary driver.The acquisition of Clarity Systems marks IBM’s 24th related acquisition in the business analytics sector, including noteworthy acquisitions such as Cognos, Coremetrics, Netezza, SPSS, among others.  In fact, according to IBM, “in just four years, IBM has invested more than $14 billion in 24 analytics related acquisitions, dedicated 7,000 consultants and opened eight analytics Centers of Excellence around the world to help clients uncover hidden insights within their data.” We fully anticipate the battle ground for data management and business analytics will remain fierce as big systems vendors like EMC, HP, IBM, Oracle and others are all vying to help organizations deal with the ever-growing influx of (un)structured data and its relevancy to decision-making processes.
• Business analytics and GRC/compliance functions will converge. Interestingly, it was the regulatory compliance and reporting capabilities, not CPM, that sparked IBM’s interest in Clarity Systems.  The acquisition of Clarity Systems extends IBM’s business analytics initiatives, but represents a new level of commitment to address financial governance and risk management challenges faced by financial departments and the CFO’s office.  In particular, its products help address financial governance and risk management faced by automating financial, statutory and regulatory reporting for the close-to-report cycle required the U.S. SEC.

As we assess the marketplace and continue an active briefing schedule with a range of global leaders and emerging innovators, the progression of functional compliance acquisitions into analytical settings is inevitable.

Let us know what you’re seeing the market place. Thanks and have a great week!

Brian Klemenhagen

Brian Klemenhagen is a Director at TripleTree covering enterprise application across numerous industries and specializes in Software as a Service. You can email Brian at bklemenhagen@triple-tree.com.

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