IBM buys Telelogic to boost software development tools

Stuart Corner
Tuesday, 12 June 2007 08:45

Business IT - Technology

IBM is to buy Telelogic, a Swedish developer of software development tools, for approximately $US745 million in cash.

Telelogic products help organisations define, model, build, test, deliver and govern the development of software used in complex systems such as aircraft radar or a car's anti-lock braking system.
IBM says that with Telelogic and business partners, it will be able to accelerate a customer's ability to develop high-quality complex systems. "For example, a consumer electronics company could use IBM and Telelogic technologies to help design the software in an intelligent home network that controls the entertainment devices, security systems, appliances, and lighting. An automotive manufacturer would use IBM and Telelogic solutions to help build and deliver software that runs the navigation systems in vehicles."

Telelogic will become part of the Rational Software division of IBM, reporting to Dr Danny Sabbah, general manager of IBM Rational Software. It is the division's second major acquisition in a week: it has just announced plans to buy Watchfire  a developer of security, quality testing and compliance testing tools for use in software development.

Telelogic claims more than 8,000 customers worldwide, primarily in the aerospace and defence, telecommunications and automotive industries. It has more than 1,100 employees, operations in 22 countries and, in 2006, revenues of approximately $U208m.

Bola Rotibi, principal analyst at Ovum, said: "This is pretty big news because of what it signifies for this market and IBM's strategy going forward...For both Telelogic and IBM customers it should ultimately be viewed as offering great potential. IBM has been missing a few key capabilities in its application lifecycle (aka software development) portfolio which the purchase of Telelogic plugs up quite nicely....IBM has wanted to put something together to address the field of enterprise architecture but so far has only managed to talk about it through its Architectural Management vision [and] Telelogic purchased System Architect the leading Enterprise Architecture tool about 18months ago."

According to Rotibi, "IBM Rational's Testing facilities whilst relatively strong in the embedded space have for sometime taken a back seat to the advanced facilities offered by Compuware, Mercury and even Borland. Telelogic further strengthens the embedded capabilities (offering wide opportunities in the telecoms/appliance/equipment market), however the acquisition provides the boost that IBM Rational guys need to rework their wider testing portfolio: Watch out HP (Mercury), Compuware and Borland."