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About SPSS Inc.

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Corporate History

Background

Two themes have dominated the evolution of SPSS Inc. as a company:

The Company's mission to "drive the widespread use of data in decision-making" derives directly from these two themes. The company's success has been based upon its ability to demonstrate the very real benefits that the use of SPSS technology provides. Underlying this ability is the collective conviction that analyzing data, and incorporating the results into the decision-making process, leads to better decisions.

The origins of SPSS

In 1968, Norman H. Nie, C. Hadlai (Tex) Hull and Dale H. Bent, three young men from disparate professional backgrounds, developed a software system based on the idea of using statistics to turn raw data into information essential to decision-making. These three innovators were pioneers in their field, visionaries who recognized early that data and how you analyze it is the driving force behind sound decision-making—the DNA of intelligence.

This revolutionary statistical software system was called SPSS, which stood for the Statistical Package for the Social Sciences. Nie, Hull and Bent developed SPSS out of the need to quickly analyze volumes of social science data gathered through various methods of research. The initial work on SPSS was done at Stanford University with the intention to make it available only for local consumption and not international distribution. Nie, a social scientist and Stanford doctoral candidate, represented the target audience and set the requirements; Bent, a Stanford University doctoral candidate in operations research, had the analysis expertise and designed the SPSS system file structure; and Hull, who had recently graduated from Stanford with a master of business administration degree, programmed.

As is typical of creations born of necessity, SPSS quickly caught on at universities throughout America and was soon in demand. It also became apparent to the developers of SPSS that they had more on their hands than an effective, efficient method of analyzing data; they had a viable product. In addition to their academic work, they now needed to consider pricing, shipping and other issues of commerce. They made sure that tapes of source code were sent to a small, but enthusiastic, user community, and continually maintained and enhanced SPSS.

After graduate school in 1969, Nie joined the University of Chicago's National Opinion Research Center. The University of Chicago considered SPSS an important intellectual property and encouraged Nie's continuing development of the software system. Nie was successful in recruiting Hull to join him at the University of Chicago by encouraging him to take a position as the head of the university's Computation Center. Bent, a Canadian, decided not to join Nie and Hull in Chicago, and returned to Canada where he had an academic appointment at the University of Alberta. With Nie and Hull juggling both their academic and SPSS responsibilities, they continued to work diligently spreading the word and market appeal of SPSS.

The early success of SPSS was directly related to the quality and availability of the documentation that accompanied the software. McGraw-Hill published the first SPSS user's manual in 1970. Once the manual was available in college bookstores, demand for the program took off. Nie, Bent, and Hull received a royalty from sales of the manual but nothing from distribution of the program. In Nie's words, "It was like Gillette selling razors at cost and getting its profits from the blades."

With the sales of SPSS growing rapidly, the IRS determined in 1971 that SPSS was a small software company, which threatened the non-profit status of the University of Chicago within which SPSS had been housed. In 1975, SPSS incorporated and the two founders, Nie and Hull, neither of whom ever dreamed of running their own business, became the new company's executives. In spite of having no venture capital or financial backing, these two entrepreneurs secured for SPSS universal control of the academic marketplace due to the fact that SPSS was, and is, a portable code that enabled academic institutions to port it to most of the large mainframe computer systems, which included Control Data 6000 series, Burroughs large systems, Univac 1108, GE (subsequently Honeywell) large systems, Digital Equipment Corporation (DEC) large systems. SPSS also quickly became useful to the government and commercial markets. NASA began using SPSS for mean time between part failure on the space shuttle in the mid-1970s, and the National Forest Service used the software for incidences of injuries and bear encounters throughout the national parks system. Consumer products companies like Procter & Gamble and Anheuser-Busch also realized the value of SPSS in analyzing marketing research data.

Another factor contributing to the growth of the Company in the 1970s was Nie's, Hull's and their employees' effectiveness in understanding their customer base and staying ahead of the technology curve. In the mid-1980s they introduced the first mainframe statistical package to appear on a personal computer. The organization was first again in 1992 with the release of statistical products for the Microsoft Windows® personal computer operating system. SPSS Inc.'s reputation for thought leadership and innovators continued to grow with the onset of the Internet and the dawn of the Information Economy.

In 1992, Nie felt that it was time to turn over the day-to-day management of the Company to new leadership. Jack Noonan was appointed SPSS Inc.'s president and chief executive officer, and Nie continued as chairman of the board. Hull remained on the development side of the business where he is still currently involved in the development of SPSS and other key technologies. Many of the original employees of the company still remain employees of SPSS Inc.

Under Noonan's leadership SPSS Inc. continued to flourish by keeping in touch with its customers' needs and staying abreast of technological advances. The Company strengthened its leadership in the analytical marketplace through acquisitions that expanded the depth and breadth of its analytical offerings. Acquisitions included the addition of technologies such as data mining, a business intelligence suite for the IBM® eServer iSeries, Web analytics, sophisticated analytical components, a Web interface for online analytical processing (OLAP) technology and text mining. These technologies were introduced by SPSS Inc. to better capitalize on the expanding need for understanding ever-increasing volumes of data, and to support the company's mission to drive the widespread use of data in decision-making.

Over its thirty-seven year history, SPSS Inc. has evolved into an international corporation that delivers analytical tools and solutions to organizations around the globe. While customers and their industries vary, they share a common need to gather insight from the analysis of data. The Company's analytical technology from its early beginnings has enabled organizations to learn from the past, understand what is happening today and anticipate the future in order to manage it effectively.

Company Timeline

There have been five stages of growth in the institutional history of SPSS:

1968-1975: "SPSS becomes a product," when the technology was first developed and grew on its own as an academic enterprise. SPSS founders, Norman H. Nie, C. Hadlai (Tex) Hull and Dale H. Bent, distribute tapes of source code to a small, but enthusiastic, user community, while maintenance and enhancement was done by the original authors.

1975-1984: "SPSS becomes a corporation." The Company is separately incorporated when its revenues threatened the non-profit status of its original hosting institution, the National Opinion Research Center at the University of Chicago. During this start-up phase, the business was organized and a number of development initiatives were undertaken.

1984-1992: "The age of the PC, " with the Company growing from $18m to $38m on the strength of the market-leading statistical analysis system for PC DOS. SPSS was the first to market with a statistical software product on PC DOS.

1992-1996: "The age of Windows," with the Company shipping the first Windows version of a statistical software package in 1992. This version drove revenues to $84m by 1996. The business was focused on statistical products, and the acquisition strategy complemented this direction by bringing in other statistical products companies, such as SYSTAT (1994) and Jandel (1996).

1997-2002: "The transition to the enterprise." This period has been the age of growth by acquisition and the rise of analytic applications as a complement to the core statistical products business. The Company grew from $110m in 1997 to a projected $209m in 2002 through the acquisitions of Quantime (market research application software), ISL (data mining software), ShowCase (business intelligence software for the middle market), NetGenesis (analytical application for Web data), LexiQuest (text mining software), and netExs (a Web interface for OLAP technology).

2003: Predictive analytics is successfully established as a market segment. SPSS played a thought-leadership role in the emergence during 2003 of predictive analytics as an important, distinct segment within the broader business intelligence software sector. Predictive analytics complements and enhances other information technologies. Organizations that employ predictive analytics not only know what has happened, they also know what is likely to happen next. Most importantly, they know what to do about it by using this knowledge to increase revenue, reduce costs, and improve outcomes. SPSS saw a growing awareness of these benefits among the commercial, public sector, and academic organizations its serves. To enhance it focus on predictive analytics, SPSS acquired Dutch-based DataDistilleries, a provider of predictive analytic applications in November of 2003.

2004: Predictive analytic applications come of age. In 2004, SPSS a ccelerated the introduction of predictive analytics applications, leveraging skills and integrating technologies from recent acquisitions, including DataDistilleries. A new version of PredictiveMarketing was introduced, as well as a new application, PredictiveCallCenter. Additional development work set the stage for additional applications to be introduced in 2005.

Today: SPSS is recognized as a leader in the predictive analytics market space. Predictive analytics, which combines advanced analytics and decision optimization, will continue to be a focus for the organization as it seeks to increase marketplace understanding of the business benefits that predictive analytics provides.