News

IBM closes Rational deal

• By Michael W. Bucken
• February 26, 2003

Rational Software Corp. this week officially became part of the IBM empire with the formal closing of the $2.1 billion deal first disclosed last Dec. 6.

Officials said the Rational operation will initially operate as a separate Software Group Division headed by Mike Devlin, a founder and CEO of Rational. Devlin reports to Steve Mills, IBM senior vice president and group executive of the software operation.

Eric Schurr, Rational's top marketing executive who will remain at IBM to head the new division's marketing operation, told eADT that the unit's strategy will not change markedly except to take advantage of IBM's 10,000-person strong software sales force. ''The Rational division is just what it was before,'' Schurr said. ''For the moment, there will be no changes to the product line.

''We will look at the overall strategy [of the combined firm], but there won't be any changes for quite a while,'' continued Schurr. ''We see all kinds of opportunities to leverage IBM's technology and to maximize the development and research teams.'' Added IBM's Mills, ''Rational is an important element of our e-business on-demand initiative.''

Schurr said Rational co-founder and Chairman Paul Levy and former President and Chief Operating Officer Tom Bogan have left the firm. He also said that an undisclosed number of Rational workers in overlapping administrative and financial positions would be eliminated.

Rational competitor Merant Corp., expected to boost its configuration management offerings later this year, hopes the assimilation of Rational and IBM can boost that firm's opportunities, said Product Marketing Vice President James Rogers.