IT giant, International Business Machines Corp. ( IBM - Analyst Report ) continues to expand its big data analytics portfolio through acquisitions. IBM recently completed the acquisition of big data analytical software developer Vivisimo for an undisclosed sum.

Enterprises are always on the lookout for efficient ways to manage the vast amount of data that are generated during the business process. As per IBM estimates, 2.5 quintillion bytes of data are created every day from a variety of sources around the world, making it difficult for enterprises to analyze the data and navigate through it, which therefore impacts their competitiveness, efficiency and profitability.

Pittsburgh-based Vivisimo develops software that automatically discovers this data (structured and unstructured), scans, captures and collates it in a user-friendly single-view format. With the help of Vivisimo’s tools, users can therefore easily navigate and analyze this data with relative ease, putting it to effective use to facilitate decision making.

Vivisimo integrates business analytics functions with back-end search capabilities, a much sought after technology for enterprises, which allows them to refine data structures for quick analysis and navigation that speeds up decision making. The whole process is also less costly as compared to traditional offerings due to the fact that the navigation and analysis is done at the source, which eliminates the need for a centralized data warehouse.

Vivisimo boasts of a strong clientele of more than 140 customers in varied industries including U.S. Air Force & U.S. Navy, Social Security Administration, Defense Intelligence Agency and Procter & Gamble (PG) among others. Although Vivisimo will operate within IBM’s software group, IBM plans to sell the technology separately along with its existing offerings.

Big Data management provides a significant growth opportunity over the long term. According to market research firm IDC, the Big Data market is expected to reach $16.5 billion by 2015, growing 40% annually from $3.2 billion in 2010. We believe that the Vivisimo acquisition places IBM in a strong position to capitalize on this opportunity going forward. Further, the Vivisimo acquisition will provide a significant competitive edge to IBM over other established players such as EMC Corp. ( EMC - Analyst Report ) ), Oracle Corp. ( ORCL - Analyst Report ) and SAP AG ( SAP - Analyst Report ) .

Meanwhile, IBM also announced a partnership with Cloudera, which develops Apache Hadoop data management software. Cloudera will provide support to IBM’s third-party Hadoop distribution, which will help the company to expand its big data services over a variety of platforms going forward. We expect IBM to continue to pursue strategic acquisitions ($16.0 billion spent in acquiring 30 companies over the last six years) and partnerships in order to grab market share in the analytics market.

Business analytics is one of the four key long-term growth initiatives of IBM, in addition to cloud computing, smarter planet and growth markets. IBM expects business analytics to grow to a $16.0 billion business by 2015 and to contribute approximately 20.0% of its growth by 2015.

We believe that IBM’s strong product portfolio will help it to achieve this target going forward. However, significant competition from other vendors and sluggish enterprise spending keeps us on the sidelines. Thus, we maintain our Neutral recommendation over the long term.

Currently, IBM has a Zacks #3 Rank, which implies a Hold rating over the next 1-3 months.