I was traveling back 20 year back in time when IBM already tried to combine multiple tools data in a single repository, an initiative called AD Cycle. The grails (without groovy) of having different vendors tools communicating has been since then attempted again by some other “standards” like CDIF (Common Data Interchange Format) or PCTE (Portacle Common Tool Environment). I am sure that you have all heard about these initiatives and that they are one of the key factors when you make a tool acquisition decision. Aren’t they?

One of the problems of these initiatives for uniting tools is that vendors mostly favor bilateral alliances and create integration with selected partners. However, the most important issue is that except for IBM, most of the industry players have a (very) short life expectancy. Most of them will disappear before the time needed to define and implement such standards. Anybody remember of Knowledgeware’s ADW, Index Technologies’ Excelerator or Arthur Andersen Method/1? If yes, it means that you have some gray hairs … and a good memory (let’s see the positive points). The current list of tool partners of OSLC is far from being impressive and the probabilities that this initiative will have the same fate than its predecessors are high.

Sun Press release said “There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris.” I think that this last sentence will reflect the main point of this purchase, as far as software developers are concerned. In his quest for getting a more important share of the software infrastructure of companies, Oracle acquires mainly a programming expertise and operating system that should complement its application and databases solutions. The hardware part should also allow Oracle to offer a complete optimized hardware and software solution to its customers, even if, due to Sun smaller market share, Oracle has to be friendly with its other hardware partners like HP or Dell. Acquiring Sun, Oracle also increase its expertise in the Java middleware area, after the acquisition last year of BEA Systems.

The other fact which is contained in Sun press release sentence, or I should say which is omitted, is MySQL. Sun acquired MySQL in January 2008, as a way to boost its software offer. MySQL has been for a long time an important issue for Oracle, as it was a big competitor in the lower end of the market for databases. With this acquisition, Oracle has the possibility of “quietly” killing the MySQL development process and offer the current MySQL paying customer an opportunity to migrate towards its own database product. I don’t see Oracle maintaining two database product lines, especially if one is mainly “given away” for free. Even if existing Oracle customers may not be tempted by MySQL, this new database was always in consideration for startups. There were also some companies that tried to build upon MySQL the missing tools to bring it close to the power of Oracle products.

We expect a similar fate, silent slow death through lower financial support, for mainly of the other Sun’s technologies: NetBeans, GlassFish, JavaFX or OpenOffice. Oracle always want to get the most of the financial aspect of acquisitions and spending money on open source projects and technology that has low immediate return on investment is not something that it would consider, unless it could be used as a tactical weapon against some of its competitors, like Microsoft or SAP for instance.

Sun Press Release
http://www.sun.com/third-party/global/oracle/index.jsp

For WebSphere, the most important point is the recent acquisition of Ilog by IBM. Ilog has a strong solution for business rules management and the goal of IBM is to push this product to its existing customers and improve the positioning of WebSphere in Business Process Management. As both companies were already partners, there are no specific product integration issues. On the other end of the market, IBM is fighting RedHat’s JBoss with the free WebSphere Application Server Community Edition, pledging to offer competitive support prices for organizations that need it. There was also a presentation of the sMash, a product that allows to create rapidly dynamic web applications using PHP and Groovy running on an optimized java virtual machine. This is the commercial result of the work done at projectzero.org.

On the Rational side, the intention is to provide a native implementation in the new Jazz platform of products like ClearQuest and BuildForge. The next version of the Team Concert product will be improved in terms of enterprise reporting and global project management. The product is still developed using the open commercial concept, where the software is proprietary but the development process is open for customers’ input. As far as Telelogic products are concerned, they will keep their independence and industrial software focus, but they should also get more integrated on the Jazz platform in the longer term. Rational is also introducing a new consulting concept: Measured Capability Improvement Framework (MCIF). The goal of this approach is to check how software development practices are aligned on business objectives.

With the current economic conditions, it could not be easy to sell software development solutions that require large budgets and important modifications of current practices. IBM addresses this challenge by proposing a modular approach that allows a gradual transfer to its Jazz platform and the use of open source solutions in the overall software development toolbox.

With a difficult economic context that has reduced the market value for many technological companies, IBM continues to acquire smaller companies that can complement its product portfolio. After the stok market euphoria of year 2000, the stock price of ILOG has evolved laterally these recent years, making the decision of selling itself less difficult. ILOG will provide to IBM interesting technology for business rule management systems (BRMS) and rule engines for managing business change and process improvement. It has also a nice offering in the visualization market with products that adds sophisticated displays to Java, C++, and .NET applications, for the desktop and rich internet applications. The deal will provide ILOG technology with a better visibility and bigger sales channels.

http://www.ilog.com/corporate/releases/us/080728_ibm.cfm

Buying EDS would vault HP to second place in the global technology services industry, behind International Business Machines Corp. EDS brings HP a strong base in infrastructure outsourcing and the combined company would be better-equipped to go after large clients. In 2000 HP already tried to buy PriceWaterhouseCoopers consulting unit without success. IBM acquired this business in 2002 for a much lower price than what HP was ready to pay.

EDS has a lower margin than HP, but could offer more “stable” outsourcing revenues that are provided by long term contracts. It could help some cross selling other HP products. With this move, HP is trying to emulate IBM’s strategy, as IBM draws about 60% of its revenues from services. By acquiring EDS, HP also gets its hands on EDS’ 60 percent stake in mPhasiS, an Indian services and outsourcing company, with 27,000 workers. IBM has around 50,000 employees in the region; Accenture about 22,000. The EDS stake in mPhasiS could allow HP to reinforce its presence in the fast growing Asiatic market.

However, HP could also face some serious problems. The lack of integration means that the deal will bring no cost synergies, usually an important motivation for this type of acquisition. We could also see some possible political wars between HP and EDS employees that will fight for independence.

The financial community is worried about the price paid. HP shares fell nearly 7 percent after the deal was announced on Tuesday, on top of a 5 percent drop on Monday in anticipation of the news. The declines have wiped about $13 billion off HP’s market value, taking it to $108 billion. The important question is to know if HP, like for the missed PWC deal of 2000, has the bad habit to buy at the peak of the market? Did somebody else want to acquire EDS at this price with the uncertain economic forecasts?

The final release of Team Concert should be somewhere in June. Doing it on time for the Rational Software Development Conference would have been a good thing, but apparently this result will be difficult to achieve, even if the product has been beta tested since June 2007. Between 6 to 12 partners are working with IBM to have their products integrated with Team Concert, even if the current API are not yet finalized. A next goal will be to provide integration with Microsoft’s Visual Studio. Even if the product is open, integration could not be an easy task when some access rights have two be synchronized between the Jazz server and the external product for instance.

The origin of the project was the need to have a common infrastructure for the many products (ClearCase, ClearQuest, and etc..) grouped under the Rational banner. If Eclipse could be considered a desktop integration platform, Jazz has the ambition to provide development process integration at the server level. Distributed teams will be able to set a clear software process with related projects roles and share easily artifacts like piece of code, defects or build results. It will also provide managers (IT or business) some good dashboards to follow the project progression.

From what I have seen from a demo that shows Rational Team Concert features accessed through an Eclipse client, the product targets more medium to large teams (even if currently there is a limitation of 250 users by server) that operate in a geographically distributed environments. Some “template” processes will be available with the tool for approaches like OpenUP or Scrum. Even if the product tries to get an “agile” label, the way it enforces structure and project reporting seems to make it more suited for projects that need (or want) strong auditing features. John told us that the tool was liked by both IBM developers and auditors. I don’t think that such a convergence of likeness could be achieved in many places…

It was funny to see that the “we are agile” marketing slide comes just after a slide mentioning that one of the goal of the tool is to reduce status meetings. I thought daily meetings were one of the main concepts behind Scrum ;o) It is however also true that geographically distributed teams face different challenges.

MySQL was forecasted to set an IPO this year, but it seems that with the difficult conditions of the stock market its initial investors have chosen the easy solution to cash their money by letting Sun acquire the company.

For Sun, who recently changed its NASDAQ stock ticker from SUN to JAVA, it is a confirmation that the new strategic direction is in software and services. This move is therefore an important step to transform itself more in a service oriented company. With MySQL, Sun acquires a fast-growing company that has already a dual open source-commercial approach. Its estimated 2007 revenues were around $70 million. It is also a quick and good ticket to enter the database market already occupied by its competitors (Microsoft, Oracle and IBM). We suppose that Sun will not touch a lot to the existing MySQL organization. Being backed by a bigger company will bring an increased credibility and a better sales channel. Sun could also provide additional resources to improve its product so that it will become a more fierce competitor against Oracle.

The acquisition could also help Sun to propose its own alternative to the open source Linux/Apache/MySQL/PHP (LAMP) architecture. As it put its Solaris operating system in open source last year, it could propose a Solaris/Apache/MySQL/Java (SAMJ) pack that could be optimized. This could be a real alternative to the Windows ecosystem that is backed by a “old” company, thus allowing medium-size companies to have the impression to make a safer transition than with a pack of dispersed open source projects.

This move also changes the landscape for the other companies operating in the open source database area, like PostgreSQL and Ingres. However it is also a financial validation of the open source commercial model and some companies could end being the target of a bigger fish in the future. I will not be surprised if companies like Red Hat, HP… or Yahoo! will make some acquisitions in the sector in a near future.

What benefits could Oracle achieve with this deal? Technically, it will acquire Web server and transaction monitoring software expertise. Even if Oracle has already its own set of products competing with BEA Systems, its technical reputation is a little bit lower in this area. Combined market share put Oracle in the number one position in the middleware market. However, Oracle will have to play it tactfully to keep the core technical team behind BEA products. Financially, the acquisition could provide additional revenues, a strategy Oracle has followed these past years with PeopleSoft and other targets. In this area, Oracle seems to transform itself in a Computer Associates-like company, more driven by financial interests than technical capabilities.

In the winners side of this situation, we could certainly find IBM and Red Hat’s JBoss, as uncertainty about the future of a product is always a strong topic that buyers will consider when the look for their Web server. Also some companies do not like to have too much of their software infrastructure locked to a single supplier. Losers will be BEA Systems customers, because a change of ownership always rise questions on the future roadmap of the products and the availability of knowledgeable people to provide some support. This is mainly true for BEA’s Tuxedo transaction processing product, an old software that doesn’t seem to fit into Oracle product portfolio.