Why IBM Tapped Twitter

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IBM and Twitter last week announced that IBM is integrating Twitter data using IBM resources, such as the famous Watson supercomputer, to provide sophisticated analytic solutions to IBM's army of clients. The customer arena is one of three places where Twitter's content will be processed—the alliance also calls for incorporating Twitter data with IBM analytics services in the cloud as well as specialized enterprise consulting. On the customer service side, Twitter data will be processed through IBM's ExperienceOne platform that provides engagement and sentiment data for sales, marketing, and customer service departments in the enterprise.

The IBM and Twitter announcement was startling to many tech watchers, considering the companies' starkly different cultures. To outsiders, the image of IBM, a 103-year-old company, is tht of a stodgy hardware company helmed by men outfitted in conservative suits complete with freshly starched pinstriped shirts and cuff links. San Francisco-based Twitter is sometimes still regarded as a fledgling company at the ripe old age of eight years, manned by twentysomethings wearing ripped jeans playing Foosball. On the financial side, IBM stock has recently been trading in the $150 per share range, while Twitter's shares have been changing hands in a range closer to the low $40s a year after its initial public offering.

However, IBM has been working hard to shed its traditional image, transitioning into a software and services firm—and identifies itself as a digital agency. The venerable company is also now run—for the first time in its history—by a woman, Ginni Rometty, who serves as chairman, president, and CEO. Consider, too, that Twitter is not staffed by a group of slacker Millennials—roughly half of Twitter employees are engineers.

"For the past three years, IBM—mostly through Watson but also through other investments that it's made in analytics as well as some of its professional services engagements—has established itself as a digital agency," says Dan Miller, senior analyst at Opus Research. "It's also now one of the leading providers of back-end analytics that captures large data. It's invested billions in Watson-based initiatives, and Watson has the potential to be the ultimate conversational customer-care resource for enterprises."

You Can Never Be Too Data Rich

Data, metadata—these are more than just words that are being casually thrown around these days. Companies need to understand who their customers are, what they do, where they go, what channels they prefer, what they're saying about brands, if they're likely to be loyal, and if they will return for further purchases.

Enter Twitter, which boasts impressive stats, with 284 million monthly active users and 500 million daily tweets. Twitter's robust data dovetails nicely with IBM's plans to analyze and subsequently advise clients about customer engagement strategies.

"This [deal] matches both companies' general objectives," Miller says. "For IBM, it's about getting more social real-time data into the Watson knowledge base. Twitter has its own issues about where it's going to get revenue and figuring out what its B2B enterprise strategy is, and what better partner than IBM to get into the enterprise fabric?"

The cachet of Twitter's younger user base also further shifts the perception of IBM as an old-school vendor to a software services powerhouse. The move also underscores the somewhat new concept that customers now dictate their wants and needs to vendors rather than the other way around.

“By using Twitter data, IBM seems to be understanding that customer experience is driven by the fact that customers are really empowered today,” says Omer Minkara, research director, contact center and customer experience management, at Aberdeen Group. “For example, a bad interaction in the contact center [can be blasted] on Twitter, and there goes millions spent on marketing that is trying to build a great brand that could be demolished by one single tweet.”

Kevin Bisconti, business leader for IBM's Tealeaf customer experience management solutions, wrote in a blogpost that IBM research found that "91 percent of companies have limited or no understanding of why people leave their site without converting, and over half [58 percent] of companies have limited or no understanding of which usability issues affect conversion."

Additionally, if you throw social networks into the mix, Bisconti said that "42 percent of customers expect businesses to respond to them within 60 minutes once they have contacted it via social media. They are also fickle—our research found that 63 percent of all online adults are less likely to buy from the same 

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