IBM Acquires Micromuse for Boost in Telco Realm

As the year ended, IBM continued its yearlong buying spree, adding management software maker Micromuse Inc. to its portfolio for $865 million.

As the year ended, IBM continued its yearlong buying spree, adding management software maker Micromuse Inc. to its portfolio for $865 million. The purchase gives IBM a much stronger presence among telecommunications carriers and service providers.

With the integration of its mainframe management company Candle Corp. acquisition well under way, IBM turned its attention to beefing up its ability to manage converged networks carrying data, voice and video traffic. IBM bought 10 software companies last year.

"Micromuse is one of the premier providers of management in the SIP [Session Initiation Protocol] management space. Thats one of their strengths, especially in the telco space," said Bob Madey, vice president of strategy and market management at IBMs Tivoli operation, in Austin, Texas. "Service providers are leading the adoption of VOIP [voice over IP] technology, but it is coming on strong in the enterprise. We need to marry management of SIP servers with core server and application management technology."

The acquisition also establishes IBM as a strong contender in the network management space once again, with the addition of Micromuses flagship Netcool family. IBM had competed in that market in the 1990s with its NetView product but allowed it to languish following the companys Tivoli acquisition.

"It gives them a bigger and more significant footprint in the network management and monitoring space, which theyve needed for a long time," said Rich Ptak, principal at Ptak, Noel & Associates, in Amherst, N.H. "For the kind of model they are using, they cant afford to not have a significant amount of data about whats happening in the network."

However, that was only part of the motivation for IBM to acquire Micromuse, according to Madey. "Micromuse provides great assets in the network management space, in the security management space as well as in business service management," he said.

Micromuse, of San Francisco, in August closed its acquisition of security information management provider GuardedNet Inc. in a $16.2 million cash deal. That yielded for Micromuse the rebranded Netcool/NeuSecure suite of real-time security monitoring, incident management, risk mitigation, and auditing and regulatory compliance software.

Another motivation for IBMs acquisition of Micromuse is its people, including CEO Lloyd Carney, who will remain through the transition and report to Tivoli General Manager Al Zollar, Madey said. More specifically, IBM acquired important expertise in the networking arena, which the company had been actively ignoring for years.

Vital stats in IBMs Micromuse acquisition

* Price $865 million

* Number of employees 650

* CEO Lloyd Carney

* Flagship product Netcool network management

* Primary customer base Telcos and service providers