IBM Buys Virtualization Billing Specialist

IBM has acquired CIMS Lab, Inc., a privately-held company whose software helps companies track and bill software and hardware usage in virtualized environments.

Financial details were not disclosed in the deal, which will fill one of the voids in IBM’s broad utility strategy.

Virtualization allows IT administrators to run several operating systems, applications or storage pools on fewer physical devices to cut down both data center clutter and IT costs.

For the last few years, Big Blue and rivals Sun Microsystems and HP have promoted virtualization as a key cog of strategies that allow users to get computing resources when they need it and pay for only what they use, similar to the way utilities are procured from an electric company.

But one of the main stumbling blocks preventing companies from taking up virtualization was the dearth of ways to help them track usage and costs of that usage. For enterprises, figuring out how is owed can be just as much a bugbear as maintaining the systems.

With CIMS Lab, IBM is addressing that problem.

CIMS Lab’s software helps businesses track the usage of computing resources across virtualized servers, storage, e-mail, networks, databases, applications and operating systems.

The software gathers data about IT resource usage and converts it into financial information that can help companies figure out how their technology resources are being consumed and how much its costs the company.

Ron Riffe, storage software strategist with IBM, noted that IBM has helped customers identify how much virtual resources their individual customers might be using for a long time, but that was relegated to mainframes.

“What we’re seeing now as we continue rolling out virtualization to heterogeneous, open system platforms is that customers are asking the same questions: ‘how do I determine how much of the physical and software assets am I suing with my constituents.’

Riffe cited the example of a bank.

A bank typically has several different businesses –- commercial loans, mortgage branch and retail banking –-that share software applications and storage devices.

CIMS Lab’s software would help the bank determine how much usage should be billed back to each department, which helps to better allocate IT spending, Riffe said.

Roseville, Calif.,’s CIMS Lab and IBM, which have been partners since 2003, have more than 170 joint customers worldwide in financial services, government, healthcare and manufacturing.

IBM will tuck CIMS into its Tivoli division. Eventually, IBM plans to ship CIMS Lab with IBM Director to complement the virtualization features in xSeries eServers and pSeries eServers. IBM also plans to integrate CIMS software with IBM Tivoli software products as part of an accounting and chargeback offering.

Systems vendors would do well to address dicey areas such as billing because the rate at which large companies are acquiring virtualization technologies is ramping up, according to market researcher IDC.

IDC said companies will spend $15 billion worldwide by 2009 on virtualization, with more than three-quarters of all companies with 500+ employees deploying virtual servers. The companies surveyed also expect that 45 percent of new servers purchased in 2007 will be virtualized.

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