Big Blue paid US$1.2 billion to buy the Chicago-based high-end analytics software company in mid-2009.
According to Steve Mills, senior vice present and group executive of IBM Software Group, the Xi'an facility now serves as a gateway to China's remote western region and well as a global hub for analytics development that will help clients around the world adopt predictive analytics capabilities tailored for their industry-specific requirements.
As part of IBM's China Development Laboratory, the Xi'an lab will include a dedicated team of more than 200 software engineers and IT architects, said Mills.
Mills declined to provide details on additional R&D investment and headcount growth to be brought by this current move, but a spokesperson from the Xi'an facility estimated that headcount for the lab will grow from 202 last year to 219 in 2010.
Prior to the IBM acquisition, the Xi'an lab established in 2004 was already SPSS' most important R&D facility worldwide, said the lab spokesperson, adding that the lab had more than half of SPSS' R&D resources and contributed to all product lines of the analytics firm.
According to IDC (www.idc.com), market opportunity for business analytics in China is expected to grow 10 percent annually from 2009 to 2013, faster than the average IT market growth of 8 percent. The demand is driven by risk management, compliance mandates, and the desire to adopt business analytics into their operations, said IDC.
On the same day, IBM also announced a west China business unit for its software group and a development lab for the west region that Big Blue has high expectations.
In 2000, the Chinese government launched the western region development strategy to help the under-developed regions catch up with the coastal provinces in eastern China. Driven by stimulus investment, the average annual growth for the past 10 years was 11.6 percent, which was significant to the 370 million people, said IBM.
"Xi'an is the largest and most developed city in the west. In its course of further industrialization and urbanization, software helping decision-making is on higher demand," said Mills.
According to IBM, Xi'an City Commercial Bank is working with Big Blue's Xi'an lab to explore how it can transform its operations through improved insight on their business information and predict new outcomes for improved customer service.
The bank is the first foreign invested commercial bank in western China, said IBM, adding that it is becoming one of the most profitable domestic commercial banks in the region with 113 branches and 2,000 employees.
The bank has also expanded into the newly opened Guanzhong - Tianshui Economic Zone in the province of Shaanxi where Xi'an is the provincial capital.
"The second ten-year plan for the western region development is about to be in action," said Jing Junhai, Vice Governor of Shaanxi Province. "We appreciate and welcome that IBM is enhancing investment in Xi'an. We hope more vendors will come to Xi'an to help make our city better and the western region more developed."
On a global basis, IBM said it has invested more than $12 billion to build a business analytics portfolio which includes organic innovation and acquisitions. With 4,000 analytics consultants, the company is working with more than 250,000 clients worldwide on predictive analytics, including 22 of the top 24 global commercial banks, 18 of the world's top 22 telecommunication carriers and 11 of the top 12 US specialty retailers, said IBM.
This story, "IBM turns SPSS China lab into global analytics R&D hub" was originally published by Computerworld Hong Kong.