IBM To Acquire Candle

Consummating what has been 28-year relationship rooted in the mainframe, IBM on Thursday announced plans to acquire longtime partner and privately held tools vendor Candle Corp. The deal, for which financial details were not disclosed, is aimed at shoring up IBM's enterprise systems-management solutions with an arsenal of tools to monitor everything from the mainframe and WebSphere offerings to the DB2 database and other infrastructure, according to IBM officials.

Robert LeBlanc, general manager for IBM's Tivoli group, says Candle's capabilities and products will help IBM fill in some of its own technology gaps and play a strategic role in furthering Big Blue's on-demand vision.

"We are focused on the end-to-end management of infrastructure," LeBlanc says. "What Candle brings is a set of complementary products and technologies around data-center management and automation, as well as optimizing applications and managing service levels for a business."

Why merge now, after a productive and very close partnership dating back to 1976 when Candle entrenched itself as a major player in mainframe tooling? From Candle's perspective, the catalyst is a changed marketplace, one in which customers are eschewing point solutions that require integration work in favor of well-integrated offerings that get them what they need from fewer vendor sources. Candle president and COO Andy Mullins says the company had come to a fork in the road, where it could either choose to expand its own portfolio by buying up smaller companies rapidly, or instead join up with a larger player like IBM. The latter path involved a much lower risk for the 800-employee company, Mullins says.

From a product perspective, Candle brings three elements to the table. For one, the company carries a line of data-center management tools that gauge the performance and availability of systems ranging from Zseries mainframes to distributed platforms like Linux, Unix and Windows. Candle also sports an application infrastructure management solution that helps simplify administration and management of IBM's WebSphere application server as well as other J2EE environments. Last, the company has a suite of real-time application analytics tools that report on service levels as they pertain to business process impact. So, for example, a customer can measure how well an end user is receiving service from a particular application, then tap Candle's infrastructure-management tools to root out the source of the bottleneck, Mullins says.

IBM believes this troika of capabilities built into its existing management offerings will simplify buying decisions for customers and implementation work for partners. According to LeBlanc, the company's goal is to help consolidate the $25 billion systems-management space, which he calls "fragmented." The market counts such heavy-hitters as BMC Software, Computer Associates and, particularly on the mainframe, Compuware.

The deal benefits IBM in several ways, according to James Governor, industry analyst with Red-Monk. For one, it gives IBM another beachhead among its systems-management rivals, if the acquisition scales all of its regulatory hurdles. Furthermore, it strengthens IBM's ability to provide management coverage across its product lines, especially bridging the mainframe-WebSphere-MQ messaging ecosystem, Governor says. Last, the combined products hold appeal to customers.

"This will enable IBM instantaneously to go to Candle's customers and say, 'We can help you dramatically lower your third-party software tooling,'" Governor says. "That means they can cut their mainframe budget by X-amount. It's an instant win [for IBM] in terms of portfolio consolidation around the mainframe.

As far as partners go, Candle counts between 75 and 100 of its own partners, a great deal of whom are already IBM partners as well. For those not aligned with Big Blue, the plan is to begin training them to migrate them into the fold, Mullins says.