IBM To Acquire Business Rules Software Developer ILOG

IBM Monday disclosed plans to acquire ILOG, a developer of business rules management software, for approximately $340 million.

IBM plans to combine Paris, France-based ILOG's business rules management software with its business process management, business optimization and service-oriented architecture products, the company said. The combination will let IBM offer its channel partners and customers "a full set of management rules for complete information and application lifecycle management," IBM said in a statement.

ILOG's software, for example, can be used to set business rules in an application that assigns priority to a company's best customers waiting in a phone queue for support. The ability to adjust business rules and policies helps organizations respond more quickly to changing business conditions.

"Rules help businesses make better decisions," said Sandy Carter, vice president of SOA and WebSphere at IBM. While IBM has some rules management software of its own, Carter said acquiring ILOG brings in more sophisticated rules technology and a rules repository. The acquisition also provides IBM with optimization algorithms for helping businesses determine the best way to use resources to achieve its goals; and visualization technology for complex decision-making common in such markets as telecommunications and defense.

IBM plans to pay 10 Euros per share of ILOG stock in a deal valued at 215 million Euros ($340 million U.S.). The two companies expect to complete the deal, which is subject to regulatory approvals and a final vote of ILOG's board of directors, by the end of the year.

ILOG has some 3,000 customers and reported sales of $181 million for its fiscal 2008 ended June 30.

IBM said ILOG's technology has the potential to enhance the capabilities of many of its software products, including its Information Management, Lotus, Tivoli and WebSphere lines of software. The visualization technology, for example, can be added to Tivoli to help systems managers view complex networks, Carter said.

In addition to its direct-sale customers, ILOG has more than 500 OEM, solution integrator and ISV channel partners, IBM said. The company's technology, for example, is built into supply chain management applications from major vendors such as Oracle, SAP and i2, said a report from Technology Business Research.

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