Posted on 12/08/2002 11:31:34 AM PST by chance33_98
IBM's $2.1bn Rational deal to upset market
By Peter Williams [06-12-2002]
Big Blue's biggest takeover since acquiring Lotus
In its largest software takeover since acquiring Lotus, IBM is to buy software development tools company Rational Software for approximately $2.1bn (£1.33bn). Rational provides software and services to 98 of the Fortune 100 companies, including IBM itself, operating in a market that analyst group IDC estimates will grow from $9bn (£5.7bn) now to $15bn (£9.5bn) by 2006.
Ian Charlesworth, senior research analyst at Butler Group, said: "The announcement is clearly huge news, and is likely to 'unsettle' the application development market, not least Microsoft.
"It demonstrates just how critically application design and development is to IBM as a whole."
Rational had positioned itself cleverly and until today had been seen as independent, Charlesworth said.
"Like it or not, it has plunged into the IBM world, and this could affect the way existing users feel. Managing the expectations and concerns of users may prove to be the greatest challenge," he added.
Michael Devlin, Rational's chief executive, said: "The combination of IBM and Rational is a logical extension to what has been a very beneficial 20-year relationship."
IBM vice president Steve Mills said: "This is an important part of IBM's On Demand strategy." He added that Rational would help provide infrastructure software and tools to give customers a complete software development environment.
In recent months integrated development environment companies like Borland and modelling tools specialists such as Rational have been moving into each other's territories as they expand across the development lifecycle and adopt open standards.
One driver has been the Object Management Group's model-driven architecture standard that attempts to convert standard system models into application code.
IBM's main acquisitions since January 2000
IBM is where good companies go to die.
In a midnight-stealth deal, the CEO took the IBM offer without even waiting for a competing offer from Microsoft, when most of Rational's customers use their tools on Microsoft's platforms.
Now, instead of providing additional revenue to IBM, Microsoft will improve Visio's UML tools, and bury Rational Rose and the rest of the software suite without so much as a whimper.
Anyone remember Notes? Sure, the CEO and the board get rich, but for the great developers at Rational, I expect most of them will end up in Redmond in the not too distant future.
According to a Business Week article, Microsoft was planning inhouse development to replace the Rational offerings!
Absolutely. This is a fight to the death between IBM, and Intel/Microsoft for control of the network computing space.
IBM bought Rational because they knew of Microsofts own development....and they knew they needed this technology to own the business applications back-end.
And anyone who thinks Visio's UML is even close to Rational code is smokin' somthin'.
*shudder* We're stuck with that bloated piece of crapware in our operation. I never knew how bad it could be, but Notes is truly an abomination.
"The real threat, however, is Microsoft, which is also making the same move. While Rational has long been allied with Microsoft, the software giant now shows every sign of developing its own tools."
Microsoft is one of my clients, and I dont know where they get this idea, which appears to be speculation more than reporting anyway.
Microsoft's Visual Studio.NET Enterprise has an enhanced version of Visio which does a less than adequate job of UML modeling and code generation, and is very weak compared to Rational Rose.
It would have been just as easy for Microsoft to throw a little pocket change at Rational to pick them up, but they were not given the opportunity.
I have no doubt that Microsoft now feels it was treated rudely by a partner, which usually ends up with Microsoft placing a big target on that company's back. In two years, I expect the Rational tools to be marginalized niche products.
There are not too many corporations who's people could actually sell that product for money.
Notes is a product that most companies wouldnt use if it was free.
Hopefully the link will work for you!
I think you're right about Rose. Visio is a poor man's Rose already, Rose is bigtime bloatware, and Microsoft will walk right into that market. But the cross platform tools like Purify aren't a target market for Microsoft. But the bloat in Purify and ClearCase will end up killing them too.
The biggest problem with Rose, is that it takes as long to learn to use correctly, as it does to just code up your project. Rose and the rest of the Rational Suite is unsuitable for anything but the largest of projects, unless (like me) you can get the tools and training for free.
Because I work for a number of companies at any one time, Rational's tools have been very helpful to me from a modeling perspective, and the XDE works well with both C# and VB.NET code-gen.
There is a pretty good discussion going on over at Slashdot about this very thing.
Use it every day. It's not nearly as bad as you say; far from it, actually........and I've used most such packages on the market over the years. A bit on the complex side to set up, but it just ................works. Have it fired up right now, matter of fact.
I'll certainly be watching developments.
Yeah, but try describing that strategy in an Elevator speech. IBM has already forgotten everything that Gerstner taught them.
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