IBM deals focus on servers, services

IBM announced a trio of deals Wednesday that it hopes will make its servers, services and semiconductors more attractive to customers.

Big Blue said it is investing in MontaVista Software, maker of a Linux operating system variant for PowerPC processors, and has signed a deal with MatrixOne, which sells software that helps companies design and manage the life cycle of new products. IBM also announced an alliance with International Business Systems.

The deals, while different in nature, will promote several areas of crucial interest for IBM, including its Global Services division, servers and semiconductors.

Sunnyvale, Calif.-based MontaVista, for example, will expand its support for IBM's PowerPC processors, used in the embedded and networking markets. The addition of new features to the Linux OS, aimed at supporting IBM's PowerPC-based network processors and associated chips, could help IBM sell the chips in new areas.

Although the semiconductor business has been hit hard by the economic slowdown, IBM saw some growth in the fourth quarter and predicted a similar scenario for the first quarter, signaling a potential turnaround in that business.

IBM will also take a financial stake in MontaVista and engage in joint sales and marketing efforts, the companies said. Terms of the deal were not disclosed, although MontaVista announced a new round of funding worth $28 million Wednesday.

IBM's pact with MatrixOne, meanwhile, is intended to create hardware and software bundles, with MatrixOne applications running on IBM servers. An IBM-MatrixOne bundle would include MatrixOne's eMatrix application for product life-cycle management running on an IBM eServer, along with IBM's DB2 database and WebSphere software. IBM Global Services will provide consulting as well as customize the bundle.

IBM and Westford, Mass.-based MatrixOne plan initially to focus on the consumer packaged-goods and life-sciences industries.

In its third announcement Wednesday, IBM said that through a new alliance with IBS it would support IBS Virtual Enterprise Supply Chain software with IBM software, servers and services.

IBM shares were down $1.73 to $108.77 in trading Wednesday morning.