The news comes in the same week that business software maker SAP announced it was buying Cloud-based HR services specialist SuccessFactors.
Both acquisitions underscore the growth potential the IT industry recognizes in Cloud-based services.
IBM is paying about 440 million dlrs for DemandTec, which specializes in cloud-based analytics software that enables businesses to examine different customer buying scenarios.
DemandTec software is designed to help companies make price, promotion and assortment decisions. IBM sees strong growth for these products against a backdrop of rapid shifts in consumer buying patterns. It estimates the market for its "Smarter Commerce" software products at 20 billion dlrs. IBM launched its strategy last March.
The US-based IT services group said the acquisition will help it extend its footprint in Cloud-based retail products. It also noted that DemandTec expands its Software-as-a Service (SaaS) strategy by adding additional, subscription-based offerings.
Craig Hayman, general manager of Industry Solutions at IBM defined a core part of "Smarter Commerce" as "bringing science to the art of pricing and promotion."
The acquisition is subject to DemandTec shareholder approval, applicable regulatory clearances and other customary closing conditions. It’s expected to close in the first quarter of 2012.