Five years ago this month IBM acquired Rational Software, an application lifecycle developer tools vendor that has become an integral part of the IBM software story.
IBM Rational is a prime example of IBM's successful acquisition strategy to broaden its software base.
Five years ago, IBM Software Group Senior Vice President Steve Mills set out to draw a deeper connection to IBM middleware technology with a focus on building a complete, process-integrated software development platform.
IBM acquired Rational Software on Feb. 20, 2003, for $2.1 billion, and since that time Rational has not only provided IBM with new software tools to market, but also has helped improve the way the systems giant develops its products and delivers services to customers.
"I am entirely satisfied" with the Rational deal, Mills told eWEEK in an interview. Mills said the motivation behind the deal was that IBM had a long-term partnership with Rational and needed to beef up the tooling across its middleware line. And since the acquisition, Rational technology has been fused with WebSphere, Tivoli and Lotus software in various ways, he said.
"We knew we needed to tool the WebSphere run-time," Mills said.
Danny Sabbah, general manager of the Rational software unit at IBM, said that today the Rational "business is twice the size of what it was when we acquired it"-through both organic growth and acquisitions.
Sabbah said Rational's focus on the governance of software and systems development and delivery has paid off, as has the division's enterprise modernization portfolio and languages and compilers focus. Rational also launched an effort to support developers in the SOA (service-oriented architecture) space. Meanwhile, demand for Rational's requirements management, quality management and other tools has remained strong, Sabbah said.
For the fourth quarter of 2007, IBM Rational revenue grew by 22 percent over the same period in 2006, and for the entire year, Rational's revenue grew 16 percent over 2006. And in 2007 the Rational division itself oversaw two key IBM Software Group acquisitions: BuildForge, a build management software company; and Watchfire, a Web application security software vendor.
A focus on the customer has helped drive revenue, Sabbah said.
"One of the things I've tried to do is focus the team on a much more active view of how we support our customers," Sabbah said. "One thing we've instituted is a passion for satisfying customers."