recently moved to acquire Rational Software, it touched off a frenzy of speculation in the software industry.
While the deal had been pegged as all but a foregone conclusion for the last several years, the debate roiled among analysts and other software vendors, many of whom took different tacks in discussing the nuances of the deal. One true consensus that has yet to be challenged is that the deal is a fine play for Big Blue, who hadn't made such a hefty software-centric purchase since it nabbed Lotus Networks in 1995.
What the new purchase did was cause analysts to wonder how this affects the market for software tools. Rational offers integrated lifecycle tools in the requirements & analysis, visual modeling, testing, software configuration management, project management and process categories. Rational is the leading maker of modeling tools, which let developers collaborate on their programs before they build them, and competes head-to-head with Borland in infrastructure; however, both compete with tool initiatives from Microsoft's Developer's Network and the IBM-led Eclipse. Now IBM has bid to buy Rational, whom it has enjoyed a long-term relationship with, and wants to fold it into its software division as its fifth unit ostensibly filling a gap in the Eclipse framework.
IBM's impetus for the purchase was no doubt sparked by the tendency toward design-driven development, in which design models need to be synchronized with code changes so that they stay up to date. Developers or business analysts want the choice of working at either the code layer, or graphically through the design layer, depending on what is most appropriate for the task. Diagram changes need to become visible in the code immediately, and vice versa. Project managers want to see all the tools put together in the same package - modeling, coding, testing, performance management, version control, installation, bug tracking and documentation. Once they are bundled with the application server they can be integrated with other systems or published as Web services.
All of this is fine and dandy, right? Well, no, not exactly. The problem is: Rational enjoys partnerships with a number of software makers, including BEA, Oracle, Sunand Microsoft, for which it has XDE Professional v2002, an integrated development environment (IDE) tool for both .NET and J2EE. Rational also sells its Rose modeling tool alongside Microsoft's Visual Studio tools. IBM competes with the former three on many levels.
Forrester Analyst Ted Schadler said he has questions about how the other systems vendors will maintain "developer mindshare" now that Rational appears about to become part of IBM.
"Microsoft's value to IBM is clear, but you have to ask how the Sun's Oracle's and BEA's will maintain developer mindshare," Schadler said. "Rational's value to IBM is high. We've been [stressing] integration for years. The developer and runtime environments have to come together -- you can't develop an application in isolation and just throw it over the wall. In a multi-tiered application environment, you need to have a good relationship between the developer tools and the middleware."
While IBM shares strong partnerships and ideologies with Microsoft in the Web services realm (IBM runs Windows on its WebSphere platforms), some analysts wonder whether Microsoft will be keen on the idea that IBM will be able to make Eclipse that much more influential for developers.
Jason Bloomberg, senior analyst of XML and Web services research firm ZapThink, doesn't see Microsoft making a big deal about the issue, noting that IBM and Microsoft support each other in many ways.
"IBM will clearly take full advantage of XDE for WebSphere, while XDE for .NET's future is somewhat up in the air," Bloomberg said. "My prediction is that IBM will continue to fully support it -- after all, many IBM customers also have .NET, and IBM is committed to interoperability in heterogeneous environments."
Folks at Sun Microsystems seem to think Microsoft might be a little on edge, however. Mark Herring, senior director of Sun's Java, Web Services & Tools Business, said although the deal is par for the course in the software industry, Microsoft might not take to kindly to IBM's reach.
"If there are any losers in this, I would think it would be the .NET developers," Herring said. "I can't see IBM allowing Rational to continue to focus on MSFT technologies. I can see the .NET developer saying, 'Oh no, what am I going to do?'"
As it stands, Herring conceded Sun, fresh from its own legal skirmishes with the Redmond, Wash. software giant, is a spectator in this one. Herring noted that Rational "isn't abandoning the Java developer" and said if Microsoft had acquired Rational it might be a different story.
Microsoft declined to comment for this story, but reports have burbled out of some outlets, such as Reuters, which said Microsoft is contemplating its own bid for Rational to stymie IBM. If that fails, the report said, Microsoft might then go after Borlandto counter IBM. The former route could tender some nasty legal battles between Big Redmond and Big Blue.
So how have other software players taken to the would-be blockbuster deal? Find out more on Page 2