IBM Acquires Telelogic 2

After several months of internal discussion, IBM has finally explained how the Telelogic acquisition (announced in June 2007) is going to be folded into the Rational brand. I have just listened to an analyst call with Danny Sabbah (general manager of Rational) and Neeraj Chandra (EVP of Telelogic).

Let’s take the minor headlines first. IBM has announced three main areas of integration across the extended product family.

• end-to-end, extensible, open standards-based platform
• community-based collaboration
• preserve and protect client investments in Rational and Telelogic products

This seems to be about interoperability between the different products, interworking between teams using different products and upward compatibility (i.e. no forced migration) of client models and other assets built using the different products. These are the inescapable challenges of software industry consolidation, which IBM and its customers are very familiar with.

But it’s the other three headlines that are the interesting ones, because they reveal what IBM thinks it is gaining from the Telelogic acquisition. According to IBM, the Rational product family is extended in three main areas:

• systems with embedded software
  
• product lifecycle management
  
• enterprise architecture
  

with an emphasis on sectors with complex requirements for systems and software

• electronics
  
• aerospace & defense
  
• automotive
  
• telecom
  

What I find interesting about these two lists is what they leave out.

Firstly, requirements management doesn’t get a headline mention. Requirements management was a major strength of Telelogic, and DOORS is the market leading tool. Perhaps we are supposed to believe that Rational already had a perfectly adequate approach to requirements management, and Rational System Architect works fine, thank you very much, except in a couple of specialist areas (systems engineering, product engineering).

Secondly, it ignores the current push towards enterprise architecture in other sectors, notably Government, where I understand Telelogic’s System Architect tool (ex-Popkin of course) has a significant presence. (The IBM materials mention DODAF and MODAF but not TOGAF, FEA, or xGEA.)

And thirdly, not much mention of SOA, except as an enabling technology for back-office systems. Telelogic System Architect had come out with an SOA-enabled version shortly before the acquisition announcement, but it isn’t yet clear where this is going. Danny Sabbah did mention expanding the opportunities for Telelogic's architectural frameworks products in the SOA space, but this seemed to be in reference to sales rather than development.

There are two domains in play, according to IBM: an IT domain (supporting business operations) and a systems domain (producing products). Although Neeraj Chandra wanted us to know that Telelogic could contribute to the IT domain as well, the official Rational line seems to be that the Telelogic is to be used primarily in the systems domain.

For systems domain read systems-of-systems domain. Examples cited include aerospace systems and consumer electronics, where interoperability between multiple systems is needed to solve a complex requirement.

But as I have long argued, SOA itself is essentially a systems-of-systems approach – interoperability between multiple services to solve complex sets of requirements. So I hope IBM doesn’t intend to bury SOA somewhere in the IT domain. Shouldn't there be a separate services domain?

There are of course plenty of outstanding questions. In answer to a question on reuse, Danny talked briefly about architectural governance, but I'd like to have a much longer conversation about this. And Neeraj mentioned methodology and workflow, but it wasn't clear how any of this gets plugged into RUP (or perhaps RUP/SE).

I do think the acquisition of Telelogic gives IBM Rational a tremendous opportunity, but clearly they have plenty of work to realise this opportunity. Certainly not the end of the story.

And then there were more ...

Following my previous post on Consolidation: And then there were two ...

Did I give the impression that ERP was more-or-less into the end-game, once Oracle had bought PeopleSoft and Siebel? Well I am afraid I forgot about PeopleSoft co-founder and former chairman David Duffield, whose new ERP company Workday has just bought Cape Clear.

They don't give up easily, do they. Meanwhile Jan Baan (founder of Baan Software, which was bought by Invensys, then sold to SSA, and is now part of Infor Global, the third largest ERP company) is running BPM player Cordys. And of course Ross Perot founded Perot Systems after selling EDS to General Motors.

Is Bill Gates really going to be happy and fulfilled as a philanthropist? Is he going to run for president? (He'd do better than pRospero, that's for sure.) Or will he get the software itch again?

And then there were two ...

So Microsoft wants to buy Yahoo!, huh? The BBC describes this as a shotgun wedding - with Google wielding the shotgun. [BBC News, February 1st, 2008] And in a post entitled Monkey Boy's three-legged race, Fake Steve Jobs reminds Steve Ballmer of his previous disdain for mergers. When such mergers involved companies getting together to compete against Microsoft, maybe Microsoft could afford to be confidently superior. But now it seems it's Microsoft that needs a merger (with Yahoo!) to compete against the market leader (Google), and Ballmer's previous words may come back to haunt him.

(For another deal like this, think of Oracle buying PeopleSoft to compete with SAP.)

Google purports to be upset at the deal, with a pompous protest from its Chief Legal Officer entitled Yahoo! and the future of the Internet, and even the often cynical Fake Steve seems to take this protest at face value. But if Fake Steve's own analysis is correct, Google has no need to worry. Challenging the deal may simply be a way of making sure the Microsoft board can't back down without losing face.

Apart from Google, Microsoft and the Yahoo! shareholders, who are the winners and losers in this game? Bill Burnham thinks that this is a Bad Deal for Silicon Valley, because Yahoo! was one of the prime buyers of internet startups (notably del.icio.us and Flickr). But of course there are plenty other players. eBay is perhaps still licking its wounds after the over-priced acquisition of Skype, and NewsCorp (which has ruled out a rival bid for Yahoo!) maybe hasn't yet quite worked out what to do with MySpace, but that leaves TimeWarner (owner of AOL), Comcast (owner of thePlatform), IAC (owner of Ask and Bloglines) and a few others.

Oh yes, AOL-TimeWarner, that was a merger wasn't it? The $200bn company that was created by the take-over of media giant TimeWarner by the Internet upstart AOL, but the letters AOL no longer part of the company name, and AOL has now reverted to its ordained place in the corporate world, as a division of a large media company called TimeWarner. A number of the AOL local operations have been sold off, and Google currently has a 5% stake of the remainder [Press Release].

In the past, TimeWarner has got rid of many once-profitable divisions, including Atari, MTV Networks, and Time-Life. Some investors have demanded a break-up of Time and Warner, so perhaps a return to the good old days of Warner Brothers. That kind of thing seems to be normal ebb and flow among media companies. Companies can merge, but they don't necessarily stay merged.

But we haven't seen much of that in the software industry yet. To date, IBM and Microsoft have successfully defended themselves against regulatory break-up. (But the future demands of Wall Street may be more difficult to ignore.) The post-merger Microsoft will be a different kind of company, with new challenges. Maybe Steve Ballmer needs to take Larry Ellison out to lunch and pick his brains. (And I never thought I'd say that.)

Update (further commentary)

• If apparently intelligent people/organizations do apparently stupid things, it is tempting to look for some secret conspiracy or hidden motive that will make sense of the plan. For example, the Economist thinks this might be a devious trap to get Google snared in antitrust action. [The Economist (Feb 5th), via Fake Steve Jobs]

• Marc Andreessen agrees with me that there are plenty other companies acquiring Internet property, but Bill Burnham still thinks the overall effect is negative for Silicon Valley. Fred Wilson sums up: It's time to think long-term.

• Meanwhile Fake Steve Jobs is enjoying himself. Some months ago he was complaining of boredom, pining for a really good train-wreck merger. A reader asks if the Microsoft / Yahoo deal qualifies for this description. FSJ's answer is a resounding Yes.
  

Another Update

• Fake Steve has finally worked out the truth: Google is secretly praying for the Microhoo deal to go through

IBM acquires Telelogic

A couple of weeks ago, I was discussing the future of modelling tools over breakfast with Danny Sabbah, General Manager of IBM Rational Software. The modelling tools market is growing fairly slowly, and Danny made it clear that Rational was looking to increase its market share substantially.

So today's announcement [note 1] that IBM is going to acquire Telelogic makes a lot of commercial sense. Telelogic has an impressive portfolio of tools, especially since its acquisition of Popkin in 2005, and it has a strong position in Requirements Management (DOORS) and Enterprise Architecture (System Architect). Popkin contributed significantly to the Business Process Management Initiative (BPMI), and was closely allied to John Zachman.

Telelogic's tools and methods didn't suit every user company, and in the past I have sometimes had occasion to be mildly critical of Popkin, especially from an SOA perspective. The Popkin acquisition was billed at the time as a move into SOA [note 2] but this promise was only just starting to be realised with the announcement last month of System Architect for SOA [note 3].

If IBM had wanted to buy a pure SOA modelling company, there would have been other, perhaps worthier candidates. But Telelogic is undoubtedly more attractive to IBM, because of its other assets and relationships; IBM can be relatively unconcerned by Telelogic's weaknesses, and should have little difficulty reassuring the customers of both companies.

But growth by acquisition is only one piece of Danny's strategy for IBM Rational. Another important piece is a shift in focus - from selling tools and technologies to selling process and business value. This means selling to the business, not selling to developers. Instead of being billed as a software engineering methodology, RUP may come to be positioned as an industry model for the software development industry, which IBM should be able sell in the same way it sells industry models for banking, insurance and other industries.

Modelling tool vendors have always faced the problem of growth. If the tools are good, they may get a loyal community of keen developers, but that is not quite enough. Rational itself had reached a plateau as an independent vendor before its acquisition by IBM in 2002. Is there more consolidation to come?

[Note 1] IBM to Acquire Telelogic to Advance Global Software Delivery Strategy (June 2007), IBM beats HP in bid for Telelogic (June 2007)

[Note 2] Telelogic's Popkin Purchase Prepares the Way for SOA (April 2005), Telelogic looks to bring modeling to SOA (Nov 2006)

[Note 3] Telelogic Facilitates Service Oriented Architecture Adoption (May 2007), Telelogic Adds Business Process SOA Solution (May 2007), Telelogic tools tie software services to business processes (June 2007)

From Oracle to SOA Governance

Consolidation: Oracle acquires Siebel

Oracle's acquisition of Siebel (together with its previous acquisition of PeopleSoft) is attracting a great deal of interest. Some stakeholders and observers have made interesting comparisons. 

 

§	Oracle is the new Computer Associates	Marc Benioff (SalesForce.com)
§	Oracle is the new Microsoft	Dana Blankenhorn (ZDNet), Paul Roberts (eWeek)

 

Both of these statements need to be taken sceptically in my view; each large IT company has its own style of acquisition, its own style of managing (and possibly integrating) its expanding product portfolio. 

Nicholas (Does IT Matter?) Carr comments on the duality of this event: consolidation and disruption. At one level, enteprise software becoming a mature commodity ripe for consolidation; at a higher level enterprise solutions becoming decomposed and recomposed according to SOA principles. See also commentary by Dan Farber (ZDnet). 

 

Disruption: Salesforce

If there is to be disruption, the business model being promoted by SalesForce.com seems like a good candidate. A number of commentators (see above) have been convinced by Marc Benioff's bullish statements at DreamForce (the SalesForce.com conference). However E. Schwartz (InfoWorld TechWatch) posts a sceptical note. The key question here is whether large corporate users will be willing to rely upon a smaller service provider, and how long can SalesForce.com remain independent. (Many commentators have been unable to resist speculating about a possible future acquisition of SalesForce.com; and it is always fun to imagine various win-win permutations.)

 

Asymmetric Rationalization

Industry consolidation involves a form of supply-side rationalization: rationalization of the vendor by the vendor for the vendor. Of course, acquisition is only the first step of this process. There are various possible outcomes in terms of the consolidation of sales and marketing, the consolidation of brands, the consolidation of underlying technologies, components and platforms. Large software companies are generally trying to get a good balance between extracting maximum revenue from cash-cow software products and/or services, and developing new markets for new products/services. 

Meanwhile, large corporate users are also under pressure to rationalize their IT provision - to achieve maximum economies and value-for-money while continuing to support the complex and changing IT requirements of the business. 

The relationship between these two rationalization processes is a complex one. While there are some obvious conflicts of interest, there are also many opportunities for collaboration: between vendors, between users, as well as across the vendor-user divide. OpenSource and ApplicationExchange (which Nicholas Carr sees as a reincarnation of IBM SHARE) can both be regarded as forms of sociotechnical collaboration. 

 

SOA Governance

Which somehow brings us to Service-Oriented Architecture (SOA).

James Governor (Redmonk) suggests that the Oracle consolidation provides a trigger for user organizations to sort out IT governance - as a defence against the growing monopoly power of Oracle. Perhaps now is the time to sort out your relationships across the IT vendorspace, sort out your platform and procurement strategy. This is the user side of vendor rationalization. 

Radovan Janecek (Systinet) (SOAG Starting Point, Ultimate Vision of SOA) explains why this is an SOA governance issue and not just an IT governance issue. The bones of his argument are like this: business goals ... IT services ... reuse ... trust ... contract ... control ... metadata. And for Joe McKendrick (ZDNet), SOA provides a vision of independence from any single vendor. 

At one level, standardization on a product or platform ties you to a specific vendor or vendor community. Software monoculture carries significant risk - both because it increases the likely impact of any security breaches, and because it may foreclose some forms of innovation. However, if you can standardize the interfaces at the right level, you may be able to combine software economies with requisite variety and software biodiversity. Doing this properly is a complex architectural trick, but if it is achieved it provides a great argument for SOA. 

The big picture is broader than a single organization. While large organizations will need internal SOA governance, they will also increasingly need to participate in external SOA-based collaborations. There are two kinds of interoperability involved - endo-interoperability (within a single enterprise) and exo-interoperability - and therefore at least two kinds of SOA governance. 

For more on SOA Governance, please look at my article on Metropolis and SOA Governance. written with Philip Boxer and published in the Microsoft Architecture Journal. We are currently working on a sequel, in which we will illustrate the concepts of endo-interoperability and exo-interoperability, and explore their implications for structure, process and organization. Any discussion would be most welcome.

Portfolio Management

Computer Associates acquires Niku, variously described as IT Governance, Business Portfolio Management, Enterprise Portfolio Management and Business Service Optimization.

Niku's main product is Clarity, described as "a project and portfolio management solution that provides comprehensive management of IT projects, programs and initiatives as a portfolio of projects". Some of the marketing material talks so generically about investments and assets that the product appears to be usable for managing any investments, not just IT acquisitions and developments.

The obvious comparison is IBM's acquisition of Systemcorp, which is now incorporated in the Rational product suite as Rational Portfolio Manager. Other independent tools include Planview. Presumably Clarity is being positioned as CA's offering in this space, and I look forward to seeing appropriate integration with other development tools from CA and third parties.

Portfolio management is seen as a way of connecting the business with software development, and extends the scope of the software process. Besides good tools, there is a clear need for process guidance. See for example Scott Ambler's piece on Extending the RUP with the Portfolio Management Discipline.

Much of the time, an IT portfolio is assumed to be a portfolio of (development) projects. Like an open-ended development programme, but with greater distribution of responsibility and diversity of outcome. While many of the disciplines of programme management also apply to portfolio management (including quality management and risk management), there is a greater emphasis on business investment and ROI. Some proponents of IT portfolio management (arguing from the analogy of financial portfolio theory) see it as a way of smoothing IT risk across the enterprise. See for example this IBM paper on What CIOs can learn from portfolio theory.

But of course IT isn't just about projects. IT management includes the delivery and support of services via a complex set of assets and relationships. A complete IT portfolio includes assets, contracts, services and lots of other stuff.

CA already has a separate tool (Unicenter Argis) for portfolio asset management. In the longer-term, it would make sense for CA to bring together all aspects of IT portfolio management into a single tool, to support optimization across the whole of IT.

Technorati Tags: ComputerAssociates IBM IT Portfolio Niku Rational Unicenter

Microsoft and Groove

Microsoft is buying Groove Networks (news.com, March 10th 2005). See commentary by Stephen O'Grady (Redmonk), which discusses the potential threat to Lotus and other tools in the collaboration space. See also commentary by Michael Sampson, which discusses some of the technical options now facing Microsoft.

But I think there's something else interesting here. At Groove, both Ray Ozzie and Michael Helfrich were enthusiastic proponents of the concept of Power to the Edge. See Ray's review of the 2003 book by Alberts and Hayes. Ray is now becoming a senior manager at Microsoft, reporting directly to Bill Gates. Michael left Groove at the end of January. 

Meanwhile John Stenbit, the former assistant secretary of defense who wrote the foreword to the Alberts and Hayes book, joined the board of directors of Groove in November 2004 (press release). (He is also on the boards of Cryptek, McDonald Bradley, Mercator Partners, SI International and Viasat.)

So what is Microsoft's role going to be in providing a platform for the Edge Organization? This is something we are going to have to explain and explore over the next few months and beyond.


Update

Over the years, Microsoft has used the Groove brandname for various purposes, including collaboration, filesharing and music streaming.

Ray Ozzie worked for Microsoft until 2010, initially as one of three Chief Technology Officers, subsequently taking over from Bill Gates as Chief Software Architect.

After leaving Groove, Michael Helfrich set up a company called Blueforce, initially specializing in the defence sector before expanding into other areas of government.

John Stenbit is still on the boards of several companies.


Former Assistant Secretary Of Defense John P. Stenbit Joins Groove Networks Board of Directors (BusinessWire, 18 November 2004)

See also Power to the Edge (December 2005)

Independent Modelling Tools

It's an old debate.

Firstly, are you are going to do model-based software development?	I have been an strong advocate of model-based development since the early 1980s, and I wrote my first book on data modelling in 1984. For over ten years, I worked for a company (JMA Information Engineering, which became part of Texas Instruments Software) that designed and sold modelling methods and tools.
Secondly, are you going to use a proper tool?	For me, this means not just loads of stand-alone diagrams (e.g. PowerPoint) or linked diagrams with standard notations (Visio), but a repository capable of supporting several users working on a single large model, and perhaps offering several different diagrams with a common underlying semantics (e.g. IDEF, UML).
Thirdly, are you going to use the modelling tool that is integrated with the implementation platform, or an independent tool?	While I have a strongly held position on the first two questions, I do not have a strong position on the third question. I can see advantages both ways.

Independent	Integrated
Allows you to have a single modelling approach across multiple platforms. Allows you to build the model before you select the platform. Allows you to switch platform without changing the model. Allows you to use the special features of a particular modelling tool.	Simplifies coordination and change management between conceptual model and software design. Supports "round-trip" software engineering. Integrated models may also support rival platforms (although possibly with lower levels of integration).

With the latest ("Atlantic") release of the Rational product family, IBM is bringing the modelling tools closer to the platform. Meanwhile Keith Short's team at Microsoft is developing an integrated approach to modelling. (Keith was also at JMA/TI and was the architect of Integrated CASE.)

Thus market forces may be tilting the balance towards the integrated tools. Can the independent tools survive?

Some consolidation is probably inevitable, and presumably some of the other platform vendors would be interested in beefing up on the modelling front. I noted a small announcement last week from Popkin, who are getting cosy with Oracle. Is this a sign of things to come?

Popkin/Oracle announcement (December 2004)
Earlier post on Consolidation (October 2004)
Earlier post on Models and Code (July 2004)
Earlier post on Software Factories (July 2004)

---

Update December 16th 2004

In a useful reply to Grady Booch (December 3rd, 2004), Jean-Jacques Dubray (December 14th, 2004) contrasts the Microsoft version of MDA with the OMG version.

Meanwhile, IBM has its own version of MDA, based on Eclipse. Although Eclipse may be supported by many vendors, it is still a platform, and the Eclipse Modelling/Management Framework (EMF) can hardly be regarded as truly platform independent.

Although EMF is currently aligned with UML, it may be able to accommodate a broad range of other modelling languages, including both older languages (IDEF) and newer ones (BPMN?). Thus third party modelling tool vendors may find themselves a niche within EMF. However, the extent to which they can be fully integrated into the software lifecyle remains unclear.

Consolidation

Several commentators see the recent merger of Actional and Westbridge as a harbinger of industry consolidation among web service players.

• David Sprott (CBDI Forum) discusses whether the industry is now "Crossing the Chasm".
• Phil Wainewright (Loosely Coupled) thinks we are now entering the "Acceleration" phase. (He tells us we're still some way short of the "EndGame" phase, and then provides evidence that this phase has already started!)
  

From an economic perspective, this merger can be understood as a response to a given set of economic forces. In general terms it is easy to predict more mergers, and we may be able to identify likely targets by looking at such economic indicators as revenue, growth, funding, cashflow, cashburn and so on.

This merger can also be understood from a technological perspective, as an statement about the viability of stand-alone security products. The technological logic of the merger is to integrate security products into management platforms. The same logic can be seen in CA's acquisition of Netegrity. It is also implicit in IBM's Tivoli brand, which covers a collection of security and management products.

This reflects a growing recognition of the complexity and dynamic nature of security requirements. While many stand-alone security products do an excellent job at guarding against a specific class of threat, what is needed is an agile security architecture capable of rapidly mobilizing a range of effective responses to newly emerging threats.

Let's return to the economic perspective. Security attacks are designed to achieve the maximum penetration for the minimum effort. Many attackers are motivated not by technical ego but by results (criminal or political). If a given style of attack ceases to be effective, we can expect a new style of attack to appear. If the attackers are more agile than the defenders, then this gives them a natural advantage. Against an agile attacker, it is not wise to invest all your resources in fixed defences.

Novell

Jonathan Schwartz, President and COO of Sun, idly speculating in his personal blog about the ownership of Novell, and how it would trouble IBM if Novell fell into the hands of a competitor. This is being widely interpreted as a plan by Sun to buy Novell - or even as a hint that IBM should buy Sun - or just mischief-making.

• Radovan Janacek (Systinet)
• Peter Yared (ActiveGrid)

Prompted by this, I took a quick look at Novell - especially in terms of web services. They have a product suite exteNd, that on a casual view looks much like any other. They have copious documentation on the creation of web services. They are currently previewing a federated identity management solution, code-named Odissey. (Let's hope they've read their Homer.) And they have just acquired a UK-based consultancy called Salmon, apparently to beef up their web service services business. But if IBM or Sun bought them, all the attention would be focused on the Linux stuff, and the web service stuff might well vanish without trace. Would anyone notice or care?

Novell's uniqueness lies in their historical legacy – networking expertise and customer base. From a marketing point of view, they have a particular emphasis on overcoming/eliminating network boundaries - hence Odissey.

Arguable there is little meaningful differentiator between the web service functionality or performance of different vendors. Selection and evaluation needs to be done for the whole stack, not for the web service layer in isolation.

If Novell is taken over, then the Novell stack might well disappear, along with their web services offerings. However, this shouldn't represent a significant risk for current Novell users, since they should be able to switch to another stack. Obviously whoever buys Novell will want to make this as transparent as possible - but rival stacksters will be looking to offer easy and cheap alternatives.

Meanwhile, what on earth was the real purpose of Schwartz's airing his thoughts on IBM's dependence on Novell? POSIWID - the purpose of an action is what it achieves. Novell's share price may blip upwards (in hopes of a bidding war between IBM and Sun), but Novell revenues are likely to go down (as the uncertainty causes customers to hesitate). This is not the tactic of someone who is seriously planning a take-over bid; it makes much more sense if we see it as a spoiling tactic by a competitor.

Oracle Collaxa BPEL

I looked at Collaxa’s BPEL product a while back, and was quite impressed by their take on web service orchestration. So I noted with interest the recent rumours (now verified) of an acquisition by Oracle.

As with any merger and acquisition activity in the software industry, the outcome will be uncertain for some time. To what extent will the identity of the Collaxa innovation and team be preserved or swallowed up; to what extent will BPEL now achieve broader dissemination, across Oracle’s customer and beyond; how successful will Oracle be at integrating BPEL with the rest of its products and services; how does this help Oracle’s cause in the platform wars?

The early indicators are favourable. The announcement and launch seems to have been managed well, and the preliminary marketing material is falling into place. However, the first real indication will come with the next round of product releases, the next round of sales figures, and the next set of project success stories.