What was the reason behind buying Rational in the first place?
We had had a partnership with Rational for many years. With Rational being the premier provider of design tools and integration platform and test tools in the marketplace, our application development tools and Rationals tools had been made complementary to each other years ago, and we were doing a great deal of joint marketing and joint selling as two separate companies.
And things reached a point—as I looked at the kinds of applications customers were trying to build, and the need for deeper connection to IBM middleware technology, more focus on building end-to-end process-integrating applications—that I felt that it was important for us to become one company, and therefore be able to work together without boundary on building the capability for these kinds of sophisticated, connected, end-to-end, process-flow style of applications.
So, if the conditions of the market motivated the purchase, obviously the basic capability always motivated the partnership.
Would you say that it has paid off?
Oh, tremendously. We look at it on a near-term basis, Rational becoming part of IBM, we brought Rational back to growing in the marketplace. The previous two years, Rational had been struggling with growth in the market. We had double-digit growth with Rational software last year, and the Rational business grew at double digit.
This was a very powerful acquisition, I think, from the perspective of near-term marketplace success. And from a strategic standpoint, it reinforced over and over again that bringing together the Rational tools with the IBM tools, and focusing on a more complete solution, was going to be valuable to customers long–term.
I am very happy with the Rational acquisition. It was a great buy.
I know I was at at least one event where you said this was the best or smoothest IBM Software acquisition to date. Why do you say that?
The reason why this has worked so well is the relationship weve had with Rational has been very longstanding, and we all knew each other. So were not getting to know each other after the acquisition. And the Rational culture is very much aligned with the IBM culture.
Theres a great combination of technology as well as culture.
Whats the status of the integration?
Well, certainly on the business side we moved very quickly. Literally on the day we closed, we immediately moved to integrate. We have a fairly elaborate buddy system to link Rational people up with IBMers.
We were bringing in over 3,000 people into the software group, so it was a relatively large acquisition. We were able to complete the integration work within six months. We began winding down the specialized integration team in the August/September timeframe and everythings been operating quite well. So everythings been going extremely well from the standpoint of the integration of the business. Then on the product side, weve been aligning the portfolios.
I transferred the WebSphere application development environment mission and Lee Nackman, who was leading that, along with Lees team, over to Mike Devlin. Weve incorporated new technologies out of Research into the Rational portfolio. Weve strengthened the linkage of the Rational design tools to the WebSphere infrastructure as well as into our industry patterns work that were doing. Weve made a lot of progress in a relatively short period of time.
I expected it to go well. I had a lot of faith and trust in Mike Devlin. I think hes a great leader and certainly understands the software business inside and out. And he built a great company in Rational.
What kind of further integration can we look for?
Well, we have work to do every year. What were trying to achieve is, weve got an environment in which the design environment, the XDE environment, can drive out an ever larger percent of executable code. The customers would love to go from design through the coding steps very quickly and on into test. [b>Editors Note: Rationals XDE technology was formerly known as the Extended Development Environment.]
That requires that the tools be aware of the pattern of business youre trying to implement and the runtime environment that youre targeting the execution to. So we have more things to add into XDE as a design tool in order to further speed up the development process and increase customer efficiency.
Part of our plan is also to get more linkage on the management and monitoring side so that when the applications are being built we can set them up to be monitored and managed more effectively at time of deployment.
So you begin to think of application lifecycle as being broader than just the development process, but also the complete lifecycle of the application in production. And so were driving more linkages not just into the WebSphere infrastructure but also with the Tivoli monitoring and management tools.