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IBM Australia denies Rational analyst comment

IBM has denied analysts' claims its A$3 billion acquisition of modelling tools specialist Rational Software is designed to woo developers away from Microsoft's .Net initiative.
IBM has denied analysts' claims its planned A$3 billion acquisition of modelling tools specialist Rational Software is designed to woo developers away from Microsoft's .Net initiative.

IBM Australia's general manager, software, Australia and New Zealand, Katrina Troughton, said the claims, made by analysts in the United States, were incorrect. "No, we want our customers to use the platform they want to use.

"We have noticed that there has been a greater focus on J2EE in the marketplace and many of our customers are following that trend".

Rational Software - whose executives estimate that more than 600,000 developers worldwide use their tools - will become the fifth brand under Big Blue's software group, which already includes Lotus, DB2, Tivoli and WebSphere.

Troughton said she did not expect "any job losses within Australia with the acquisition," which, consequently would see 120 Rational employees locally brought into the IBM fold. Rational employs around 3,400 staff worldwide.

The acquisition consolidates a relationship between Rational and IBM in existence since 1985. Big Blue argues that Rational -provide[s] the broadest support for enterprise application development on J2EE, .NET or Linux".

Rational also has a long-standing relationship with Microsoft, which is crucial to the latter's presence in large corporate accounts. Microsoft sells its own modeling tools, but relies on Rational for more complex implementations, particularly for mixed installations where both Microsoft .NET and Java programming is undertaken.

Because customers demand tools to bridge competing software environments, Microsoft will need to maintain its partnership with Rational, even though the company is now owned by IBM.

"The alternative for Microsoft is brutal" said Ted Schadler, an analyst at Forrester Research. "They would have to make their own tools for the high end, which is really hard to do, even for a company as sophisticated as Microsoft".

Rational tools are used to build technical software, commercial software products and software for embedded devices and real-time systems such as pages, mobile phones, medical devices, air traffic control systems and government defense systems.

IBM and Rational expect to close the deal by the first quarter of next year.

Martin LaMonica and Margaret Kane contributed to this report.

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