IBM Buy to Fill Tivoli Hole

IBM agreed to acquire partner Isogon Corp., which
makes software that tracks inventory and applications running on mainframe

Financial terms of the deal were not made public.

Based in New York City, Isogon makes software that allows enterprises to
gauge usage and licenses for operating systems, middleware and packaged
applications running on zSeries mainframes. The assets are viewed through a
Web browser by Isogon’s more than 200 customers, including Farmers
Insurance, Sallie Mae and Nissan.

The purchase should fill a gap in IBM’s software asset management
portfolio by complementing Big Blue’s existing Tivoli License Manager
software, which takes stock of what is running on distributed systems using
Windows, Linux, Unix and other operating systems.

Asset management software helps corporate customers plan software purchases
at a time when enterprise are under the gun to understand their software.
Such software is often used to help curb duplicate software usage in the
case of mergers and acquisitions.

Such management software can also help take stock of assets lost in a
natural or synthetic disaster and help companies assess IT inventory to
comply with regulations, such as Sarbanes-Oxley or SEC 17a-4.

Used in conjunction with Tivoli License Manager, Isogon’s software could
help customers solve software licensing management problems, such as
pinpointing patterns in software usage and reconciling them with contract
terms, IBM said.

For example, if an online banking application is ramping up its usage of
software resources, the bank can track this activity ahead of time, plan for
it, and determine when they will approach a contract threshold that will
require the purchase of more software.

Nancy Pearson, vice president in the Tivoli unit, said the purchase will
give IBM as complete an asset management suite as there is on the market.

“The uniqueness from our perspective is the ability for Isogon software to
gauge software usage, connect that information with relevant contracts
across the enterprise and provide the customer with an economic picture of
what software they have, what software they should have and what software is
underutilized, which the competitive products can’t do,” Pearson said.

Pearson said the deal will elevate IBM’s status among rivals such as
Computer Associates and BMC Software. Solutions from those companies track
inventory but don’t tie into contracts, terms and conditions the way
Isogon’s software does.

The deal is also complementary in part because the companies have an
existing relationship going back to 1997, Pearson said. Currently, IBM
resells Isogon’s SoftAudit, which gathers software inventory and usage data
from mainframes, and TICTOC date and time simulation software.

Should the deal close as expected in the third quarter of 2005, Isogon’s
operations will be integrated into IBM’s Tivoli infrastructure management
software business. IBM anticipates the majority of Isogon’s 90 employees
will join the fold.

Isogon would be the Tivoli unit’s seventh purchase since 2001, including last
year’s purchases of Cyanea and Candle Corp.

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