IBM Plans Acquisition of Watchfire

IBM plans to buy Watchfire, a maker of Web application security and compliance testing software.

IBM announced plans to acquire Massachusetts-based software vendor Watchfire in a bid to beef up compliance testing and security for Web applications as they are being developed.

Financial terms of the deal, which is subject to regulatory approval, were not disclosed. The acquisition is expected to close in the third quarter of 2007.

Watchfire specializes in testing security for Web applications, as well as compliance testing tools. Together, the technology from Watchfire and IBM Rational software will help customers integrate Web application security and compliance throughout the development process, enabling customers to test and track the compliance of their applications with security, legal and corporate requirements, company officials said.

Watchfire technology will also complement existing IBM Tivoli identity, access and compliance management software offerings and ISS by extending security and compliance testing as an integrated element of the application development life cycle.

This kind of capability is critical at a time when security breaches are eroding customer trust and becoming significant cost centers. According to a 2005 CSI/FBI Survey, internal security attacks cost U.S. businesses $400 billion per year.

"Security breaches and lack of compliance with industry and government regulations can topple business integrity and customer trust," said Danny Sabbah, general manager of IBM Rational software, in a statement. "Watchfire is a recognized industry leader in the security and compliance market that will further strengthen our ability to help customers mitigate risk by integrating security, quality testing and compliance testing requirements early in the software development process—before vulnerabilities are exposed."

Watchfires operations will become part of IBMs Rational software brand, which produced double-digit revenue growth in the first quarter of 2007.

/zimages/3/28571.gifClick here to read about IBMs purchase of Consul Risk Management, which specialized in compliance automation.

"IBMs purchase of Watchfire capitalizes on an important trend in the security software market: inherently secure products," said Allan Krans, an analyst at Technology Business Research, in an e-mail. "Instead of purchasing additional appliances or software packages to security IT assets, customers are demanding enterprise software products that have been built from the ground up with security in mind.

"The acquisition of Watchfire will enable IBM to leverage its Rational development tools and offer customers an automated solution for enhancing security during the product development process," Krans said.

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