IBM Buys Varicent for Cloud-Based Sales Performance Management

April 17, 2012 Alex Woodie

The big gold rush in the cloud is on, and the latest outfit to strike it rich is Varicent, a developer of compensation and sales performance management software. It was snapped up last week by a cloud- and analytics-hungry IBM for an undisclosed sum.

Varicent’s compensation and sales performance software is used by companies that use salespeople to drive much of their revenue. By more effectively managing the sales-related data–which is often spread across PCs and spreadsheets–Varicent can drive more profits from sales, and ensure that the variable rate of compensation for the salespeople is “aligned with strategic business goals” (i.e. not a dime higher than it has to be).

Varicent’s cloud-based offering does this by automating the collection and analysis of sales-related data that is typically spread across the finance, sales, human resources, and IT departments. In addition to reporting, the software helps users plan and allocate their sales territories, quotas, and compensation plans.

The software is used by the commission-driven sales programs of larger companies in the financial service, retail, IT, and telecommunications industries. The company, which was founded in 2003 and is based in Toronto, Ontario, has 180 customers, including Starwood Hotels, Covidien, Dex One, Manpower, Hertz, Office Depot, and Farmers. The company has some experience working with IBM i data through its work at Waste Management.

Varicent expects to mature its offerings as a part of IBM. “Sales Performance Management is still viewed by many in the industry as an art versus a science, but there is plenty of opportunity for this mind set to change,” Varicent president and CEO Dan Shimmerman says in a press release. “As part of IBM, we can now bring our technological expertise in maturing and advancing the efficiency and effectiveness of the sales function to a broader range of clients across the globe, who are looking to improve their processes, and strategically align incentive compensation with profitable growth.”

Terms of the deal were not disclosed. The acquisition is subject to the usual closing requirements. When it closes, it will be the latest in a long string of acquisitions of analytics companies by IBM. Other names on the list include Cognos, SPSS, Netezza, and Coremetrics. A string of other acquisitions have BI elements as well (nearly everything has an analytical angle in IBM’s Smarter Planet world), including Unica, Q1 Labs, Sterling Commerce, Open Pages, Algorithmics, and i2.