Feeds

IBM lays the rules down

The logic of ILOG

High performance access to file storage

In the aftermath of IBM’s announcement of intent to buy ILOG, it would be all too easy for us to reflect back on a conversation with ILOG’s chief executive Pierre Haren last winter at its annual user conference covering survival in the software industry.

Haren’s description of the typical life of a software vendor is that first you get a handful of successful references, then replicate to at least 20 to 30 successful accounts, then you start thinking about what your company wants to do when it grows up. Haren’s implicit message was: eat or be eaten.

We won't take the cheap shot about IBM swallowing up ILOG because this deal makes too much sense.

Both companies know each other quite well, having been partners in one way or another for about a dozen years. ILOG’s business rules engine fills a key gap in the WebSphere Process server Business Process Management (BPM) line, and most notably, we saw IBM’s SOA strategy vice president Sandy Carter keynote ILOG’s conference. IBM’s not going to haul out the big guns for any sub-$200m software company.

ILOG has had a case of multiple attention disorder for a number of years. Otherwise, how could you explain that a company of ILOG’s size would have not one or two but three separate product families that targeted almost completely different markets? Or that a $180m company could support 500 partners? ILOG was best known to us and the enterprise software world as one of a handful of providers of industrial-strength business rules management systems. That is, when your rules for conducting business are so conditional and intertwined, you need a separate system to keep them from gumming up into a hairball. That condition tends to typify the world’s largest financial institutions. That’s enough for one business.

But ILOG had two other product lines, one of them being an optimization engine that was OEM'ed to virtually every major supply chain management vendor, from SAP and Oracle to i2, Manugistics, Manhattan Associates and others. And, by the way, it also had a cottage industry business selling visualization tools to ISVs.

Complex puzzle

So how do all these pieces fit together? Just about the only common thread we could think of was the case of a supply chain customer that not only uses the optimization engine, but has such a complex supply chain that it needs to manage all the rules and policy permutations separately. And not to leave loose ends untied, it needed a vivid graphics engine to visualize supply chain analyses so it could conduct better exception management.

Suffice it to say, that is not why ILOG had three separate business units. The company happened to grow satisfactorily, showing profits for seven straight years, so that it never had to face the uncomfortable question of refocusing. Had it stayed independent, it might have had to do so - while revenues grew roughly $20m this year to $180m, profits sank from $4.9m last year to a paltry $500k this year. Blame it on currency fluctuations (based in France, ILOG would have had to discount in the US to keep customers happy), not to mention the mortgage crisis that has cratered the financial sector.

High performance access to file storage

More from The Register

next story
Windows 8.1, which you probably haven't upgraded to yet, ALREADY OBSOLETE
Pre-Update versions of new Windows version will no longer support patches
Android engineer: We DIDN'T copy Apple OR follow Samsung's orders
Veep testifies for Samsung during Apple patent trial
OpenSSL Heartbleed: Bloody nose for open-source bleeding hearts
Bloke behind the cockup says not enough people are helping crucial crypto project
Half of Twitter's 'active users' are SILENT STALKERS
Nearly 50% have NEVER tweeted a word
Windows XP still has 27 per cent market share on its deathbed
Windows 7 making some gains on XP Death Day
Internet-of-stuff startup dumps NoSQL for ... SQL?
NoSQL taste great at first but lacks proper nutrients, says startup cloud whiz
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
US taxman blows Win XP deadline, must now spend millions on custom support
Gov't IT likened to 'a Model T with a lot of things on top of it'
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.