International Business Machines Corp.'s (IBM) purchase of a Chicago software maker highlights a thriving area of the software industry: tools that can help corporate customers manage the increasingly large volumes of data they create.

On Tuesday, IBM, Armonk, N.Y., said it was paying $1.2 billion for SPSS Inc. (SPSS). SPSS makes predictive analytics software that helps companies draw on data to model future customer behavior. For example, SPSS tools could help companies predict what type of credit card will be most attractive to customers based on their previous purchases.

Predictive software like that made by SPSS and other companies is part of a broad category of data management that is poised to take off when corporate technology spending starts to recover. Companies are keeping more of the data they produce, due to regulatory pressures and because they hope the data can be used to figure out how to improve productivity, by generating more sales, cutting costs or eliminating risk.

The recent bidding war for Data Domain Inc. (DDUP), a Santa Clara, Calif., company that makes deduplication technology, highlights the attraction of companies making software that manages corporate information. After weeks of intense bidding, EMC Corp. (EMC) eventually scooped up Data Domain, beating rival NetApp Inc. (NTAP) with a $2.2 billion bid.

Predictive analytics, which helps companies model future outcomes from that information, is expected to be in particular demand. Steve Mills, who heads IBM's software business, said revenue from predictive analytics software is growing about 8% a year across the industry.

"The emphasis up until now has been on interpreting data from the past. We're trying to bring to bear the ability to make decisions in real time and predict the movements of the future," Mills said.

Already, an arms race is under way to grab a share of the broader market for products and services that manage corporate data. IBM, database giant Oracle Corp. (ORCL) and German software giant SAP A.G. (SAP) in 2007 all acquired companies that specialize in "business intelligence," a broader category of software to help mine and interpret data.

IBM's most recent move could also prompt its rivals, particularly cash-rich Oracle and Microsoft Corp. (MSFT), to make similar acquisitions, analysts say. One likely target: SPSS competitor, privately held SAS Institute Inc.

SAS' chief marketing officer, Jim Davis, said the company had received approaches in the past but wanted to remain independent.

Boris Evelson, an analyst with Forrester Research, also points to companies like Endeca Technologies Inc., Attivio Inc. and Genalytics Inc., all privately held, as possible targets. The companies provide analytics and business-based search.

Market research firm IDC forecasts the market for business intelligence products will grow 4% to $25 billion this year.

Analytics and business intelligence has become a priority for IBM, which earlier this year reorganized its global services organization to stress the importance of tools like analytics. It has also attracted competitors like SAP, which resells some SPSS software. Oracle also offers some similar capabilities.

SPSS' software is powerful because it gives buyers access to sophisticated modeling that was previously the domain of statisticians, and IBM will be able to cross-sell it to customers who already buy its database and information management products, said Rita Sallam, an analyst at research firm Gartner Inc.

IBM's Mills said SPSS' capabilities will be used to enhance IBM's existing business intelligence product, Cognos, and be tailored for industry segments such as banking, retail or insurance.

-By Jessica Hodgson, Dow Jones Newswires; 415-439-6455; jessica.hodgson@dowjones.com