IBM Acquires Metamerge

IBM Metamerge

Financial terms of the deal weren't disclosed. IBM aims to double the total number of its middleware integration developers to more than 100, from about 50 now, in the next six months, said Ambuj Goyal, general manager of solutions and strategy for the IBM Software Group.

Oslo, Norway-based Metamerge, a three-year-old company with 20 employees, had a sales pact in place with IBM. Metamerge's team of seven developers will be merged with IBM's base directory development team, Goyal said, adding that development would continue to be done from multiple sites but managed from IBM's Raleigh, N.C., facility.

The Metamerge team will be "quickly and fully integrated into the IBM Software Group," said Goyal. Just as the $13 billion IBM software business has made a "big play" in the database business with DB2 and in the application server segment with WebSphere, "we are playing for first place in the middleware integration space," he said.

Metamerge currently has only about 10 partners, including global systems integrator EDS, said Metamerge executives. Yet IBM plans to move quickly to expand the number of Metamerge partners by providing the opportunity to resell the Metamerge directory to its thousands of U.S. partners, Goyal said.

IBM is committed to moving the product aggressively through partners, which will take the lead in most accounts, according to Goyal. IBM's direct-sales force will focus on a select number of large enterprises and, even in those cases, the product sale will be done via partners, he said. "You will see a tremendous expansion of our sales capability," he said, noting that IBM will be extremely careful to make sure there's no conflict between its direct-sales force and IBM software solution providers.

The Metamerge acquisition pits IBM head-on against Novell, Microsoft, Sun Microsystems, Siemens and Critical Path in the directory integration market, industry observers said.

"From a solution provider perspective, what it really means is the last big, well-established recognized name has now legitimized or re-energized this whole concept of directory integration as a significant issue," said Earl Perkins, an analyst at research firm Meta Group. Until now, IBM hasn't "focused on or relatively ignored" this segment, said Perkins.

The use of metadirectories hasn't been widespread because of the high cost and complexity of products, Perkins said. Unless IBM is able to "bring a different perspective on the cost--in other words, the pricing model--or make the Metamerge technology easier to use and deploy," the IT giant is likely to be faced with a relatively small market of large enterprises with multiple directories, he said.

"IBM needed this kind of tool in their toolset. But if they are not able to do a better job than Sun, Siemens, Critical Path, Novell and Microsoft, then they are going to essentially appeal to a niche market," Perkins said. "There needs to be a breakthrough in this market. There needs to be some innovation that would allow easier deployment." IBM will also face challenges with Metamerge technology overlapping with its Tivoli Identity Manager and IBM MQ middleware products, he added.

Scott Silk, senior vice president of sales and marketing at ePresence, a Westborough, Mass.-based solution provider specializing in secure identity management using directory technology, said the Metamerge acquisition makes IBM more competitive against Sun and Microsoft.

"In our market, the top two platforms are Sun and Microsoft. ... This just helps from a competitive position. If you take a look at the whole push toward Web services, you have three major players vying for supremacy in Web services software: IBM, Sun and Microsoft. ... Right now we see it as a three-way horse race."

Silk said the metadirectory market is focused on the Fortune 2000, which realizes that to roll out Web services they need to "base it on a very solid metadirectory foundation.

"It is clearly a tough market right now," he said. "We are battling hard and holding our own. ... One of the huge advantages that ePresence has over small service companies is we dominate a niche, and the niche is growing in importance."