IBM Inks Isogon Deal

IBM makes its latest mainframe software acquisition, and won't rule out the possibility of more deals

June 17, 2005

2 Min Read
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IBM Corp. (NYSE: IBM) today acquired software specialist Isogon Corp. for an undisclosed fee in an attempt to bolster its mainframe software business (see IBM Acquires Isogon).

IBM and Isogon have been partners since 1997, and IBM has resold Isogon's products since last year. IBM spokesman Jeffrey Tieszen told NDCF that most of Isogons 90 employees, based in New York, are expected to come over to IBM's Tivoli software division, but, “We’re still evaluating that,” he adds. Presently, the Tivoli headquarters are in Austin, Texas.

IBM is on something of an M&A tear when it comes to its Tivoli mainframe business. Last year, IBM snapped up two other players in this space, Candle Corp. and Cyanea, adding monitoring and management of a range of mainframe applications and functions (see IBM Holds a Candle and IBM to Acquire Cyanea).

This deal, like those, proves that IBM still has high hopes for its mainframe business. On a number of occasions over the last few years, mainframe technology has been written off as outdated (see Mainframe Skills Shortage Looms). However, IBM recently unveiled a new suite of Tivoli software products to automate systems management and monitoring across its zSeries family (see IBM Automates Mainframe Management).

Isogon extends the mainframe story. The vendor sells products that track inventory and measure software usage running on high-end boxes like the zSeries. According to IBM, this will complement its existing Tivoli License Manager software.Adding new capabilities is essential to competing in the relatively narrow mainframe software market. IBM’s Tivoli is up against the likes of Hewlett-Packard Co.'s (NYSE: HPQ) Openview portfolio, as well as a slew of products from Computer Associates International Inc. (CA) (NYSE: CA) and BMC Software Inc. (NYSE: BMC).

Did IBM eye any other possible deals before deciding on this latest acquisition? Apparently not, according to Tieszen. “We went straight for Isogon,” he says. “It was a natural fit because of our long relationship and similarity of products.”

So, following on from this latest acquisition, is the vendor on the lookout for any other tasty morsels? Tieszen, unsurprisingly, was giving little away. “I wouldn’t comment on that specifically, but it’s always an option for IBM,” he says.

The Isogon deal is expected to close by the end of the third quarter.

— James Rogers, Site Editor, Next-Gen Data Center Forum0

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