Montreal ISV rounds out IBM’s Rational product line

IBM is buying Montreal’s Systemcorp ALG Ltd. to integrate its project management software into IBM’s Rational development tools group.

Financial terms of the deal were not disclosed, but IBM Rational general manager Mike Devlin said he expects the acquisition of the privately-held company

to be completed within 30 days.

“”We view this as probably one of the most exciting acquisitions of technology and of a team that we’ve done in quite some time,”” said Devlin during a Tuesday conference call. “”The project and portfolio management technology – which is the core of what Systemcorp provides – is central both to the IBM Rational strategy but also to the larger IBM strategy.””

IBM bought Rational, an analytics software specialist, in 2002.

Systemcorp has about 75 employees in the Montreal area. Most are dedicated to software development, but there are also some in professional services. All are expected to become IBM employees as a result of the acquisition

“”The objective is to maintain the team,”” said Systemcorp CEO Ari Kugler. “”We have a very strong team with over 10 years of experience in developing enterprise portfolio and project management applications.””

“”The technology moves quickly, and if we don’t get the team, the technology won’t be worth nearly as much,”” added Devlin. “”We’re very focused on retaining the team and the expertise of this team.””

The addition of Systemcorp to the Rational Group will help it draw a bead on the project management requirements in the enterprise, said Margo Visitacion, analyst with Cambridge, Mass.-based Forrester Research Inc.

“”I think the biggest hole in the old Rational platform was the ability to link needs and development way of looking at things with the managerial way of looking at things,”” said Visitacion. “”The IBM tool suite could tell you everything you needed to do to get the job done, but it couldn’t tell you if it was going to be done by Tuesday, and that’s what managers need.””

Systemcorp is a longstanding IBM partner and its tools have already been integrated to work with Big Blue’s main brands including Rational, Tivoli and Websphere. Systemcorp also has a relationship with IBM Global Services.

“”There’s over 5,000 users of this technology today and it’s viewed as (IBM Global Services’) leading offering in this area of project and portfolio management,”” said Devlin.

Systemcorp was launched in 1992 through a joint venture with SHL Systemhouse. Its flagship product, PMOffice Enterprise, was jointly developed with IBM.

The Systemcorp team will remain in the Montreal area but work closely with IBM’s main Canadian facility in Toronto, as well as Rational’s Canadian operations in Ottawa.

Devlin said Systemcorp tools will help businesses meet compliance regulations such as Sarbanes-Oxley and ISO 9000.

Systemcorp is the third major Canadian acquisition by IBM recently. Last year it bought Toronto-based Think Dynamics for its provisioning expertise and integration into IBM’s on-demand strategy. In 2002, IBM bought Ottawa-based Tarian Software which later became part of its Content Manager.

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