The IBM spending spree

Today, IBM announced that it’s buying Telelogic, a leading company in the modeling space, specifically a leader in model-driven development. Last week, IBM announced that it’s buying Watchfire, a mid-sized innovator in security and software testing. These are both savvy moves by IBM. But while the Watchfire deal is good for everyone, the Telelogic deal is less so.

With Watchfire, IBM shores up a big hole in its lineup: its IBM Rational tools are popular, but the 800-pound gorilla didn’t have the right offerings for helping companies focus on writing secure code. Buying Watchfire’s technology makes sense.

The days, I believe, of the stand-alone software security suite is soon going to be over: the IDE vendors, from IBM to Microsoft, are going to have to address security as a core feature of their software development products.

It’s analogous to spell checkers in word processors: once upon a time, spell checkers were external programs that people bought and used during a special “proofreading” phase of document creation. Today, continuous spellcheck is integral to not only word processors, but just about every application that has a text input field. That’s how it should be for spelling – and that’s how it should be for software security as well.

I see the Watchfire move as positive for the industry, as it brings software security to a higher level. The other giants, like Microsoft, Oracle, Sun, BEA and Borland, are going to respond by bringing secure coding front-and-center as well. Look for more acquisitions, more innovation, and more spending, as developers and end-users win.

With Telelogic, the motivation is consolidation. There are only a handful of companies that make top-shelf modeling software. IBM already owns the biggest fish in that pond, Rational Rose.

Telelogic’s offerings, added to IBM’s extensive testing and modeling portfolio, is a bid to buy market share, as well as fill in some technical holes in IBM’s offerings. I don’t see this as being necessarily good for the industry, or for customers (except for IBM’s customers); we’ve taken a powerful innovator and strong IBM competitor out of the market.

While the Telelogic move may spur further acquisition in the modeling and testing space, I don’t see it driving innovation, but merely reducing competition and consolidating market share.