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Microsoft to Buy Rational and/or Borland?
oblivious writes "I got this in e-mail this evening: According to a Reuters report that crossed the wires late today, the speculation is that Microsoft will make bids to buy both Rational and Borland. Shares of both Rational and Borland are up on the news, and so far both IBM and Microsoft have no comment on this report." We recently ran a story about IBMs planned purchase of Rational. Chris didn't make clear in here - it's not that Microsoft might buy both, but that Borland might be a likely target, if a bid to buy Rational out from under IBM fails, which it is likely too. Rational and IBM have signed the substantive portion of the agreement already, so any sort of counter bid would have some fun legal consequences for all involved.
If there were any rumor about MS thinking about bidding for both Rational and Borland as part of the same universe (and bear in mind that even the separate rumors are just rumors), it would surely have been in the first paragraph of Reuters' story, instead of what is (Rational), which is the more important rumor of the two.
To our valued customers:
.NET, and others.
We are delighted to tell you that IBM and Rational Software have announced a definitive agreement for IBM to purchase Rational. This is a very exciting time for both companies and builds on the extensive business relationship IBM and Rational have had for over 20 years. Most importantly, it will provide significant benefits to you.
If you've been using Rational's solution to build business applications to automate your business, you will appreciate the combination of Rational's solution with IBM's e-business strategy. IBM helps customers integrate their business processes and software infrastructures to build an on-demand e-business. This requires the integration of software development, transaction management, data management, collaboration, and systems management and security. With Rational's demonstrated strength in software development, IBM will offer leading solutions in each of these categories and provide a complete solution for creating an on-demand e-business. This includes broad support for your application development efforts for a variety of environments, including J2EE,
If you've been using Rational's solution to build software for software products and systems, you'll enjoy the benefits of an improved solution through the combination of IBM and Rational technology. Rational's outstanding solution in this space will be amplified through synergies with IBM's pervasive computing strategy. This is an important market for IBM, and Rational is key to IBM's software strategy. Whether you're building a software product, a technical system, real-time software, or embedded software, IBM will be able to provide you with industry-leading products, services and support.
Rational will become the fifth division in IBM Software Group (joining WebSphere, DB2, Lotus, and Tivoli) and retain its brand identity. The division will be led by Mike Devlin, Rational's current CEO.
As with other business acquisitions of this nature, this one will require government regulatory approval and the approval of Rational's shareholders.
IBM and Rational are impressive as separate entities. Together, with our complementary software strategies, people talents, and commitment to customer success, we can provide you with even more value.
Thank you for your continued support. We look forward to expanding our relationship with you in the future.
Best regards,
Steve Mills
Senior Vice President & Group Executive
IBM Software Group
Michael Devlin
CEO
Rational Software
Actually, this story is more accurate.
First this is jusr rumors and speculations.
Second, Borland will likely become an acquisition target for MS ONLY in the event that IBM complete the acquisition of Rational.
If MS do acquire Borland, that will be funny (and painful at the same time). They would acquire a bunch of very popular Java products! And the UML tool (which is the thing they are the most interested in) is written in Java! What will they do with it... convert it to C#?
Microsoft in buying Borland aquires not only a UML modelling tool (Borland recently aquired TogetherSoft). But, they also purchase one of the better Java vendors out there. This move is both offensive and defensive. M$ gains a UML modelling environment while simultaneously killing off a significant segment of the Java tools industry.
If Microsoft pursues Rational as well they end up with the 2 best UML tools in the industry and kill off IBM's strategic partner. The net effect is that Microsoft wins big.
However, I can't believe that M$' shareholders would agree that both purchases are necessary. I expect that if Microsoft is unable to sway Rational over then we will see them make a serious bid for Borland. After all its the UML modelling software that MS wants, and if the IBM purchase of Rational goes through then MS has no modeller for their developers.
Seeing as IBM is a large player in open source software (Apache/Eclipse/Linux) and Java I personally hope to see the Rational purchase succeed, however, M$ has a crap load of cash sitting on hand - if M$ wants to start a bidding war they certainly have the ability to.
And so the consolidation in the industry continues.
Plus, Borland just bought StarBase, which produces the StarTeam SCM system, as seen in this press release. (Wow, just look at the way the Borland logo is plastered all over the StarBase website!)
So with Rational and Borland, they knock out 2 competitors in the SCM market!
That's like saying Notepad competes with Word.
ClearCase is a full, team oriented SCM. Very robust.
Source Safe is fine for small development project (teams of 1-5, projects that have very few releases etc) but it doesn't scale well, has sh*tty back up capabilities (Can't backup if someone's logged in, can't force someone to logout...) and most of the cool functionality of a SCM (Labeling, branching, merging) are very poorly implimented.
Not to say that I don't use it for my personal development projects (scripts, small C++ COM objects, VB projects), but you must understand it's limitations.
www.christopherlewis.com