IBM Buys Candle

IBM on Thursday said it plans to acquire longtime partner Candle Corp., combining its technology with Big Blue's software for managing distributed systems from databases to servers.

April 2, 2004

3 Min Read
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IBM on Thursday said it plans to acquire longtime partner Candle Corp., combining its technology with Big Blue's software for managing distributed systems from databases to servers.

The acquisition is the latest in more than a dozen purchases by IBM's software group since 2001, which most recently included Trigo Technologies Inc. last month and Green Pastures in December.

Candle, which has been an IBM partner since 1976, sells software for managing back-end corporate systems. The company's tools are designed to improve the performance of mainframe applications, databases and application infrastructure software.

IBM plans to integrate the tools in several of its product lines, including the DB2 database, Tivoli management suite and the Java-based WebSphere line of infrastructure software. Candle is also capable of managing IBM's zSeries, Linux, Unix and Windows platforms.

"Combining the two companies will offer our customers a more comprehensive set of solutions, which will enable IT to deliver greater business value," Aubrey Chernick, chairman and chief executive of Candle, said in a statement.Privately held Candle, based in El Segundo, Calif., said it has more than 3,000 customer worldwide and employs about 800 people. The deal is expected to close during the current quarter of the year. Financial terms were not disclosed.

The Candle acquisition "highlights the growing importance of IT management in IBM's broader On Demand initiative," Dwight Davis, analyst for Summit Strategies, said.

The goal of IBM's initiative is to synchronize underlying IT infrastructure with the shifting business requirements of a company, Davis said.

"The real linchpin for it all falls into the management sphere," he said. "That's because you need to track the status of all your systems and also track the business processes that are running on them, and prioritize those processes, so you can make sure the appropriate IT resources are devoted to your top priority business needs."

Although Candle is one of a string of acquisitions since 2001, analysts do not expect IBM to stop here."IBM is very focused on executing on their $10 billion vision for their broad On-Demand vision, and we can definitely expect that this won't be their last acquisition in this space," Ronald Schmelzer, analyst for ZapThink LLC, said.

IBM's software group plans to complete its acquisition this quarter of another longtime partner, Trigo. Announced last month, the deal is expected to strengthen IBM's software for gathering and managing product information across retail supply chains.

Privately held Trigo, based in Brisbane, Calif., sells software that can draw product information, such as price, location and description, from multiple information technology systems and store it in a central repository. From there, the data can be shared with a company's customers, partners or suppliers through a portal. The software also can deliver product data to a point of sale device for price checking, for example, or a customer call center.

Trigo's retail customers include Royal Philips Electronics, Staples, Sony and Unilever.

In December, IBM bought privately held Green Pastures Software, a Corvallis, Ore.-based, content management company that eases the creation of financial documents and annual reports, product documentation and pharmaceutical submissions. It was the fourth acquisition by IBM Software's Data Management group in less than two years.IBM Software itself kicked off the buying spree with the purchase of Informix, and its eponymous database, in 2001; followed by CrossWorlds, an enterprise application integration player; and CrossAccess, a maker of mainframe access software. The software group has acquired, or announced plans to acquire, at least 15 companies since 2001.

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