Web 2.0, SOA, and Web Services: IBM's Top 25 Acquisitions Aim for Analytics, Cloud, Software Domination
In October 2002, IBM announced it had bought PricewaterhouseCoopers Consulting, the global management consulting and technology services unit of PricewaterhouseCoopers. The combination created a new global business unit, IBM Business Consulting Services, comprising more than 30,000 IBM and 30,000 more professions from PwC Consulting. IBM Business Consulting Services became the world's largest consulting services organization, with operations in more than 160 countries.
By buying Daksh eServicesan Indian outsourcing companyin 2004, IBM created a formidable business process outsourcing service portfolio. In December 2010, IBM renamed IBM Daksh as IBM Global Process Services India. The Daksh acquisition enabled IBM to get a stronghold in the Indian market. More than a quarter of IBM's employees are from India, and in 2011, IBM is expected to recruit about 24,000 more employees, giving it a total of nearly 154,000 employees from India.
IBM purchased Lotus in 1995 for $3.5 billion, primarily to acquire Lotus Notes and to establish a presence in the increasingly important client-server computing segment, which was rapidly making host-based products such as IBM's OfficeVision obsolete.
IBM closed the $5 billion acquisition of Cognos in January 2008. The deal supported IBM's Information on Demand strategy, a cross-company initiative announced in February 2006 that combines IBM's strength in information integration, content and data management and business consulting services to give more business value to information. Integrating Cognosthe 23rd IBM acquisition in support of its Information on Demand strategyenabled new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence.
IBM bought Rational in 2003 to beef up its tools offerings. Rational provides open, industry-standard tools, best practices and services for developing business applications and building software products and systems, including embedded software for devices such as cell phones and medical systems.
IBM paid $1.2 billion in 2009 for SPSS for its predictive analytics capabilities. The acquisition expanded IBM's Information on Demand software portfolio and business analytics capabilities, including the range of offerings available through IBM's Business Analytics and Optimization Consulting organization and network of Analytics Solution Centers. The acquisition strengthened IBM's Information Agenda initiative, which helps companies turn information into a strategic asset.
IBM acquired Coremetrics in June 2010 to expand its business analytics capabilities by enabling organizations to use a cloud-based delivery model to gain real-time insight into consumer interactions internally and through social media networks to develop faster, more targeted marketing campaigns. The acquisition boosted IBMs Smarter Commerce strategy.
In January 2005, IBM bought SRD, a privately held company in Las Vegas that provides identity resolution software. With this acquisition, IBM extended the capabilities of its Information Management software portfolio by bringing new levels of accuracy to identity resolution. The SRD technology helps organizations increase business insight by delivering an accurate view into individuals and relationships in real-time, enabling a wide range of solutions. The acquisition also enhanced IBM's business intelligence platform and strengthened its analytical capabilities by enabling solutions that require the melding of information stored in a variety of database and drawing out non-obvious relationships between entities.
IBM bought Tivoli Systems in March 1996 for $743 million and allowed existing executive management to operate Tivoli as a wholly owned subsidiary in the IBM Software Group. (In addition to Tivoli, this IBM division includes WebSphere, Information Management, Lotus Software and Rational Software.) IBM Tivoli provides integrated service management software to help manage business value of enterprises IT infrastructure.
In January 2008, IBM acquired XIV, a privately held storage technology company based in Tel Aviv. The company strengthened IBMs infrastructure portfolio and enabled IBM to address emerging storage opportunities such as Web 2.0 applications, digital archives and digital media. To address the new requirements associated with next-generation digital content, IBM chose XIV and its NEXTRA architecture for its ability to scale dynamically, heal itself in the event of failure and self-tune for optimum performance, all while eliminating the management burden associated with rapid growth environments.
Object Technology International (OTI)
IBM in 1996 bought OTI, whose technology formed the basis of Eclipse. OTI and Tarian transitioned to IBM in 2003 and the IBM Ottawa Software lab was formed. OTI was the company behind the VisualAge line of Smalltalk and Java development tools that eventually culminated in the open-source Eclipse tool platform and IDE (integrated development environment). IBM donated Eclipse to the open-source community in 2001 and helped found the Eclipse Foundation in 2004.
In July 2001, IBM completed its $1 billion acquisition of the database assets of Informix, which doubled the size of IBM's distributed database business.
IBM acquired Candle in June 2004. Candle, with more than 5,000 customers in 60 countries, helped customers develop, deploy and manage their enterprise infrastructure. The acquisition provided customers with an enhanced set of software solutions for managing an on-demand operating environment and complemented IBM's middleware solutions. Candle developed an extensive set of infrastructure management solutions that cover a wide range of hardware and software, including IBM's DB2, Lotus, Tivoli and WebSphere software, as well as mainframes, Linux, Unix and Windows platforms.
IBM bought DataPower in 2005 to help companies improve the performance, security and management of business processes built of reusable, open-standards-based software components. This increasingly popular approach, called SOA (service-oriented architecture), combines business operations with IT.
IBM bought MRO Software in October 2006 for $740 million. MRO offered asset and service management software and consulting to help companies efficiently manage how they buy, maintain and retire assets, such as production equipment, facilities, transportation and IT hardware and software. The acquisition built upon IBM's strategy to leverage business consulting, IT services and software to develop repeatable tools that help clients optimize and transform their businesses.
IBMs acquisition of ILOG in January 2009 combined IBMs BPM (business process management), business optimization, and SOA technologies with ILOGs business rules management systems software. IBM could help clients deliver critical business information in real-time, allowing them to make better business decisions faster. With the $340 million deal, IBM added capabilities across IBM's software platform, and ILOGs software provided another dimension of leadership for the IBM BPM portfolio. This included improved rules and business optimization for WebSphere and information management offerings, better visualization for WebSphere, Lotus and Tivoli products and solutions, and enhanced optimization and efficient supply-chain management assets for planning and scheduling within an SOA.
IBM bought Telelogic for $845 million in April 2007. Together, IBM, Telelogic and business partners help customers deliver high-quality systems to the market faster while reducing costs. Customers benefit from the combined technologies and services of both companies, providing them a wide range of software and system development capabilities, along with support from a worldwide sales and services organization. Telelogic products help organizations define, model, build, test, deliver and govern the development of software used in complex systems such as aircraft radar or a car's anti-lock braking system.
IBM acquired FileNet in August 2006 for $1.6 billion. FileNet offered business process and content management solutions. The acquisition expanded IBM's IOD initiative, launched in February 2006, which combined IBM's software, services, partners and industry consulting expertise to improve clients' business performance. The IOD strategy offers customers with data exactly when and how they need it to improve their business processes.
Internet Security Systems (ISS)
IBM bought ISS for $1.3 billion in 2006. ISS provided security solutions to thousands of companies and governments, helping to proactively protect against Internet threats across networks, desktops and servers by monitoring and managing network vulnerabilities and exploits and rapidly responding to potential threats. The acquisition bolstered IBM's IT services, software and consulting expertise, and reinforced IBM's position in the rapidly growing area of managed security services.
IBM acquired Netezza in November 2010 for $1.7 billion. Netezza expanded IBM's business analytics initiatives to help clients gain faster insights into their business information. Netezza data warehouse appliances bring analytics directly to business users through a company. Netezzas appliances were easy to deploy, enabling companies to use them for high-performance analytics while requiring minimal administration and IT skills.
IBM completed its acquisition of Sterling Commerce in August 2010 for about $1.4 billion. The company grew IBM's capabilities in helping organizations create more intelligent and dynamic business networks by simplifying and automating the way they connect and communicate with customers, partners and suppliers, both on-premise or through the cloud. Sterlings products offered cross-channel commerce and integration of customer, partner and supplier networks across a wide range of industries.
Transarc was bought by IBM in 1994 and became the IBM Pittsburgh Lab in 1999. In 2000, IBM announced OpenAFS, an open-source version of the Transarc AFS implementation. Transarc commercialized the AFS (Andrew File System) that was originally developed at Carnegie Mellon. As a member of The Open Group, Transarc also developed the DFS distributed filesystem component of the DCE (Distributed Computing Environment) that was sold by Open Group members (including Transarc). Other products included the distributed transaction processing monitor Encina (a basis for IBM's Unix-based CICS products, included in IBM's TXSeries and WebSphere), and the Solaris binary distribution of DCE.
Cast Iron Systems
IBM acquired Cast Iron Systems in May 2010 to broaden the delivery of cloud computing services for clients.??Ã Cast Iron offered industry-leading cloud integration software, appliances and services. The acquisition expanded IBMs business process and integration software portfolio, which grew more than 20 percent in the first quarter of 2010.
IBM acquired Unica in October 2010 for $480 million. Through Unica, IBM inherited enterprise and cloud-based marketing software solutions to help businesses streamline and automate marketing processes, and understand and predict customer preferences. Through both the Unica and Coremetrics acquisitions, IBM enabled its clients to develop more relevant and targeted communications while minimizing marketing costs. IBM is growing its industry software solutions designed to help companies automate, manage and accelerate core business processes across marketing, demand generation, sales, order processing and fulfillment.
IBM bought Lombardi Software in December 2009. Lombardi offered BPM software and services, helped organizations automate and integrate business processes to increase efficiencies and reduce costs. Lombardi's department-level approach to delivering process management complemented IBM's existing enterprisewide process management software capabilities.