IBM sets sights on Rational

"A Practical Guide to Federal Enterprise Architecture"

IBM Corp. announced today that it intends to acquire software development tools vendor Rational Software Corp. for $2.1 billion in cash.

Rational's extensive portfolio includes several products used by federal agencies and their contractors. One of the most popular is Rational Rose, a modeling tool that helps organizations develop enterprise architectures, which serve as blueprints for agency information technology systems and future IT investments. Enterprise architectures are required by the Clinger-Cohen Act of 1996

IBM is acquiring Rational to round out its line of system development and online management tools. The combined IBM/Rational solutions will assist customers who are developing business applications on J2EE or Microsoft Corp.'s .Net platform as well customers building technical software products and systems, according to the companies.

"This deal extends IBM's ability to help customers...with tools built on industry standards to develop, integrate and manage their business processes," said Steve Mills, senior vice president and group executive of IBM's Software Group, which will absorb Rational operations once the deal is complete -- expected during the first quarter of 2003.

Mike Devlin, the current CEO and a co-founder of Rational, will become the general manager of the new division and will report to Mills.

There are many examples of federal agencies and their contractors using Rational's products. In one, NASA developed flight optimization software for the Federal Aviation Administration using Rational's ClearCase software configuration management and change tracking products.

The federal CIO Council offers a manual on its Web site about how to develop, use and maintain an enterprise architecture called "A Practical Guide to Federal Enterprise Architecture." The guide mentions Rational Rose, among other vendors' products, as a potentially useful tool for developing an enterprise architecture.

Founded in 1981, Rational reported revenues of $689 million in its 12 months ended March 31, 2002. It has more than 3,400 employees worldwide. IBM has been a customer of Rational since 1985, and the two companies formed a strategic marketing alliance in 1999.


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