IBM announced it has acquired the San Mateo, California-based DemandTec in an all cash deal for $13.20 a share, or about $440 million.  DemandTec offers analytics software-as-a-service for the retail industry, helping companies identify consumer trends and customer behavior.  It’s insight that can be applied to optimize merchandising and marketing.  Among the retailers that use DemandTec’s software are Best Buy, The Home Depot, WalMart and over 440 other companies, the company says.

DemandTec will be integrated into IBM’s Smarter Commerce initiative.

“Bringing science to the art of pricing and promotion is a big part of this strategy, and the combination of DemandTec and IBM will help marketing and sales executives in retail and other industries drive more revenue and increase profitability.”

IBM sees a $20 billion plus opportunity with Smarter Cloud, and the DemandTec deal – which includes over 30 analytics and related patents the company holds – extends that vision. That is true from both a big data and cloud angle.

Smarter Commerce has been doing a lot of expansion in the past few months. It acquired   public sector analytics company i2, which focuses more on analyzing big data to raise public and corporate safety within metropolitan areas. Around the same time we’ve also learned of an agreement to buy Algorithmics for nearly $390 million, a Canadian firm that makes risk management analytics software targeted mainly towards the financial industry.

IBM’s M&A activity matches its in-house developments, realized thanks to a notoriously extensive R&D establishment. This month it literally pushed the frontiers of data analytics with the SKA Project. The initiative involves new software developed specifically to automate big data tasks that would normally be carried out by the scientists working with  the Square Kilometer Array telescope in New Zealand.