But Wait, There's More. . .

• IBM liked the development tools so much, it bought the company. Rational Software, that is, a maker of development tools for Unix, Windows, and Linux environments that wrap around Microsoft's Visual Studio .NET, IBM's WebSphere Studio, and various Java, C, and C++ compilers to create a managed application development environment. IBM is paying a hefty $2.1 billion in cash to acquire Rational, which counts IBM as one of its biggest customers. That is the first big acquisition of CEO Sam Palmisano's tenure, and the biggest deal IBM has done since chairman Louis Gerstner bought Lotus for $3.5 billion in 1995. The Rational brand products will be managed within IBM's Software Group by Michael Devlin, Rational's CEO, who will report to Steve Mills, general manager of Software Group. The Rational products will not be branded under the WebSphere name--at least not now. It is unclear how IBM's zSeries and iSeries platforms will play into this acquisition.

• As we anticipated the company would do several weeks ago, IBM last week announced the Linux-only versions of the pSeries 630 "Regatta-L" servers. The Linux-ready machines are based on the four-way pSeries 630s, which use IBM's 1 GHz Power4 processors. The uniprocessor and two-way machines support up to 16GB of main memory, and the four-way supports up to 32 GB of main memory. (These machines offer roughly the same raw performance as the iSeries Model 820 processors using 600MHz S-Star processors.) On the Linux-ready versions of these machines, IBM is offering the pSeries 630 in discounted, preconfigured setups called Express configurations. IBM then strips out the cost of licensing AIX on the boxes (ranging from $1,500 on the uniprocessor to $5,000 on the four-way). The resulting machines cost from $15,777 to $37,184, and provide discounts off list price for the same machines running AIX that range from 8 percent to 27 percent. The one thing that these machines do not have is a bundled Linux operating system. IBM is sending customers to SuSE to get Linux and support for it at first; other commercial Linux suppliers will follow suit in early 2003. At about the same time, IBM will offer logical partitioning on the machines as well, with one logical partition per processor.
• HTE, a provider of OS/400 and Windows applications for governmental agencies and utilities, is taking a hard look at its future after receiving an unsolicited takeover bid from a large shareholder. The Lake Mary, Florida software company announced that it has retained Broadview International, a Fort Lee, New Jersey investment firm that specializes in handling mergers and acquisitions, after Constellation Software (CSI) filed a notice with the Securities and Exchange Commission on November 15 of its intention to buy all outstanding HTE shares for $4.50 each. CSI, which is a Toronto, Ontario conglomerate of vertically focused software companies, such as Friedman, a provider of OS/400 software to furniture makers that it acquired in 1999, already owns about 10 percent of HTE's outstanding stock. HTE thinks it can do better than $4.50 per share that CSI offered, and says that several qualified buyers have offered more. HTE's annual sales have dropped from near $100 million in 1998 and 1999 to $63 million and $65 million in 2000 and 2001, respectively. The company will work with Broadview to evaluate its options, one of which HTE says is remaining an independent public company. Following Constellation's offer, HTE's stock, which is traded on the Nasdaq, increased in value to about $5.15 per share.
• Jacada is establishing new offices in Mexico and Brazil to service an increase in demand for OS/400 and mainframe legacy rejuvenation solutions in Latin America. The Atlanta, Georgia software company has already opened new offices in Mexico City and Sao Paolo, and is staffing the new offices with sales and support personnel, the company says. Jacada CEO Gideon Hollander hired industry veteran Carlos Falconi to be the company's new vice president for the Latin America and Caribbean region. Falconi, who will report directly to Hollander, has held executive sales positions at three Jacada competitors, including Aviva Solutions, Attachmate, and NetManage. The expansion into Latin America is the first aggressive move Jacada has made since restructuring the company this summer and paring its workforce by 25 percent to cut costs and improve its competitiveness in a weak economy. The company, whose stock is publicly traded on the Nasdaq, had revenues of about $25 million in 2000 and 2001, but reported revenues of $16 million through the first three quarters of 2002, compared to about $20 million over the same time last year.
• Aretech Information Services, a regional application service provider (ASP) based in Marysville, Michigan recently announced a new multi-year contract to manage the Viking Group's AS/400 hardware and software. The Viking Group, a manufacturer of fire sprinklers based in Hastings, Michigan, says it chose Aretech to manage its servers and global manufacturing, sales, and distribution software systems because of Aretech's expertise, leadership, and facilities for running OS/400 servers. Aretech is a subsidiary of SEMCO ENERGY that was spun-off as an independent ASP in 1998 after Rudy Cifolelli became SEMCO's chief information officer. It was, at the time, the aim of Cifolelli, who had previously spearheaded the transformations of two mainframe IT shops into ASPs and outsourcers, to concentrate on providing AS/400-based ASP offerings to the AS/400-rich Michigan region, where the platform is particularly popular among automotive suppliers. Aretech says the new Viking contract reflects the increasing diversity of its client base.
• SSA Global Technologies last week announced the appointment of Brian Kite to head the ERP software conglomerate's expanding worldwide sales channel organization. As vice president of channel strategy, Kite will be in charge of maintaining relationships with SSA GT's network of resellers, consultants, and service providers, as well as developing new ones. One of Kite's first jobs will be to implement a certification process for all SSA GT affiliates to ensure that companies using SSA GT's various ERP packages, as well as the extension products SSA GT has provided for CRM, business intelligence, and collaborative supply chain systems, receive consistent levels of customer service. Kite joined SSA in 1998 and was most recently responsible for managing the Windows- and Unix-based MAX International ERP product line, which SSA GT acquired from Fujitsu in 2001. Kite's appointment indicates a renewed effort from SSA GT to clarify its market strategy following a series of acquisitions of ERP companies in the last year that stands to double the size of the original SSA organization (its acquisition of Infinium is still pending, although Infinium recently took measures to speed the process). The company says it plans to expand its affiliate network, which is currently made up of 80 companies that are certified to sell and support all of SSA GT's numerous offerings, in all global regions, including the United States. Kite will report directly to Graeme Cooksley, SSA GT's executive vice president of global sales and marketing, who reports to CEO Michael Greenough.

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