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Big Blue's buy-in strategy

IBM is buying management toolmakers left and right. Mainframe pros hope the investment will lower the cost of running big iron and raise its value proposition. Will it pay off for the platform?

IBM has been on a shopping spree, filling out its mainframe management software portfolio.

With the acquisition of mainframe management company Candle Corp. last year and software provider Isogon Corp. last month, Big Blue has gobbled up a number of toolmakers of late, including others, Ascential Software Corp., Meiosys and Cyanea Systems.

And that's got some mainframe pros pondering IBM's overall management strategy. What does it mean for the platform? And will the effort pay off? Some experts think so.

Count Mike Kahn, managing director of Wellesley, Mass.-based Clipper Group, in that category. Kahn said IBM is acquiring these companies for strategic reasons rather than tactical opportunities. He doesn't expect IBM to buy up tools, take the money and run.

"A good way to judge how a company plans to use its acquisitions is to see if it continues to invest in programmers, an investment which I believe IBM will do with the majority of these acquisitions," Kahn said. "The opportunities to be a bad guy aren't left. There are too many choices now."

Bob Madley, vice president of strategy and business development for Tivoli, agrees and cites Candle as an example.

"We've taken Candle technology and improved it by incorporating it into autonomics and IT service management. We're not just reaping the money out of a technology and letting it stagnate. There's marketing, development and integration across the entire portfolio."

The cost factor

Despite IBM's support, the question remains: What will these investments do for the platform?

Jeffery W. Ream, systems programmer at New York City-based Columbia House Co., hopes the plan is to lower the cost of running big iron.

"I suspect that the primary reason [for the acquisitions] is to try to entice users back to the mainframe. Our company is abandoning the mainframe in favor of cheaper open source platforms, and software cost was the most prominent factor," Ream said.

According to Madley, these acquisitions may help keep zSeries operating costs competitive through tighter integration of various tools.

"The tighter the integration of products is, the lower the cost of running them. They come out of the box ready to work. It certainly works to reduce costs," Madley said.

But IBM isn't in business to give tools away.

"There are times when things get bundled into packages. IBM offers price points at a lower rate to make a value proposition, but I don't think they're giving products away to keep people in the fold. If people were that close to leaving, they would have taken their apps off of the mainframe already," Kahn said.

The flagship strategy

Another reason for investment is that IBM has moved the mainframe's selling points down to the rest of its portfolio. Big Blue needs to build the mainframe's value proposition back up.

"The mainframe has been the engine of change for IBM for the last few years," said Charles King, principal analyst with Hayward Calif.-based Pund-IT Research. "IBM takes existing mainframe concepts and migrates them across the other platforms. If the mainframe is going to be the fount of innovation for these platforms, what is going to give it any kind of lead?"

From the long-term standpoint, King suspects IBM is using these new offerings to supercharge the next generation of mainframe management tools.

"The mainframe is the flagship and that's where new technology goes first," Kahn said.

Beyond the mainframe, IBM's investments illustrate a broader trend in the systems management landscape -- one in which integration tools are going to play a wider roll.

According to Madley, there is a fundamental change afoot in application architecture, making systems management increasingly complex and necessary.

"In the old days, applications resided on a host, and all you had to manage was a box. Even with the distributed environment, spread across a number of servers, you're still managing apps running on boxes. But today's apps run across so many different silos, IT managers can no longer manage just their own systems and assume to know how apps are going to run," Madley said.

For more information:

Latest IBM buy will enhance virtualization toolset

IBM buys Isogon

According to Madley, IBM's strategy is to compete in the field by automating IT processes, not merely tasks.

"We couple these acquisitions with what we learn from IBM Global Services. We run the IT systems for some of the largest operations in the world. The things were learn about processes we're integrating into our offerings," Madley said.

Let us know what you think about the story; e-mail: Matt Stansberry, News Editor

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