IBM has bid SEK5.2 billion to acquire Swedish application lifecycle management firm Telelogic.

Interestingly, both companies are currently regarded as competitors since they both offer tools to support the application development lifecycle, including requirements management. Telelogic is widely regarded as providing leading tools in the complex and embedded systems market – and itself acquired a major enterprise architecture vendor in 2005, Popkin Software. Both these points have made it a target for IBM.

Once the deal concludes, IBM will have an even broader portfolio of tools to support the whole application lifecycle. In fact, one could say that IBM was somewhat lacking in support for complex, requirements-driven development, and that Telelogic’s products will round out its offerings in this area. However, it is too early to tell what the forward development plans are.

IBM can undoubtedly bring even greater sales and support capabilities. Although Telelogic has offices and partners around the world, IBM’s teams can, once they are up to speed on the products, sell and support the new range in countries where Telelogic previously did not have reach.

The deal plays well to IBM Global Services as it provides more tools for its war chest that will help win deals. The proposed deal will also put pressure on other competitors in this space such as Borland and Serena, and place significant emphasis on the importance of requirements management. Yes, Telelogic’s DOORS product, while highly sophisticated, has a somewhat dated user interface, but, although a good user interface can encourage adoption, it cannot mask a lack of content underneath the covers – and Telelogic has highly sophisticated capabilities for detailing requirements and then ensuring they can be traced through the lifecycle.

All in all, the deal looks very good for IBM. It gives it a strong vertical focus on those industries that tend to have complex requirements (such as aerospace and defense), plus market-leading enterprise architecture capability. It could also lead to an emphasis on the modeling of services in an enterprise to help move its customers towards service-oriented architecture – an area where there is a need for helpful tools.

Source: OpinionWire by Butler Group (www.butlergroup.com)