Uttam Narsu
One likely result of IBM's acquisition of Rational Software is that SCM will become part of the application platform, much as the integrated development environment (IDE) and core application tools are becoming. At first blush, nothing about the acquisition implies the death of SCM as an independent market. Rational becomes another brand in the IBM stable, and continues to compete, much as it has always done with the likes of Borland/Starbase, Computer Associates, Merant, MKS, Serena and Telelogic.
A customer would still have to buy Rational's software from IBM, separate from WebSphere. Yet, from the market positioning standpoint, having a deeper stack to compete against platform players like BEA and Microsoft (and to a lesser extent Oracle) increases the pressure on BEA, Microsoft and Oracle to match or exceed IBM's offerings.
The biggest impact of this acquisition may not come from IBM or Rational but indirectly from what it provokes others, such as BEA or Microsoft, to do in response. If the merger provokes Microsoft to debut its long-rumored and expected team/SCM functionality (an enterprise-oriented Source Code Control (SCC) interface/repository) or provokes BEA to buy Borland, then the transition of SCM as an independent market category is greatly jeopardized.
The reasons that Microsoft may feel compelled to respond are related to its efforts to increase enterprise adoption of .NET. Leaving SCM to the tender mercies of IBM/Rational may not be the wisest move, especially given the rate at which the Rational/Microsoft alliance appears to have decayed. Microsoft will feel pressured to respond in SCM, modeling and testing tools. BEA has been feeling pressure for some time and the acquisition will serve to increase that pressure.
If Microsoft does nothing, then independent SCM is not diminished too greatly, regardless of what BEA does. But if Microsoft reacts, then SCM will complete a transition to being bought and sold as part of the application platform. Such a transition may even have reverberating impacts back to IBM itself, and increase its desire to beef up its feature-deficient mainframe solution by buying Serena.
The impact on the independents of such a market transition should not be underestimated; it will challenge their ability to remain competitive. Interestingly enough, the potential response of the independents may drive them toward reinventing themselves as change management (including change of: custom applications, packaged application customization and deployment, assets, hardware and process change) vendors, focused on solving a bigger business problem.
Current Rational SCM customers will be in good shape; tighter product and process integration into the IBM product portfolio will only be accelerated. Customers of other SCM tool vendors will have few immediate concerns, since all of these products are mature and feature-rich. From a planning perspective, however, Giga recommends watching the market carefully.
If SCM moves into the platform, customers may be asked to justify why they would stay with a solution that is not as tightly integrated or as tightly aligned with their platform strategy. Customer should query their vendor for its strategic plans in the light of this acquisition.
If the vendor doesn't plan to counter IBM's new capabilities, through tighter platform integration, focused partnerships and evolution toward solving larger business problems of which SCM is just a part, then an eventual loss of market share is likely.