IBM to acquire ILOG in $340 million deal

IBM announced Monday that it plans to acquire business rules management software maker ILOG in a deal valued at $340 million.

Under the deal, IBM will merge ILOG into its WebSphere brand, in a move to expand its middleware software footprint. Middleware is a layer of software that helps servers running databases and Web site software talk with servers running applications.

By combining its business process management (BPM), business optimization, and service-oriented architecture (SOA) software with ILOG's business rules management technologies, IBM is aiming to provide customers with the ability to gather up all relevant information spread throughout their organization in real-time to make faster business decisions.

"Companies across all industries are looking for technologies to help them manage their processes with more flexibility so they can keep up with changing business conditions," Tom Rosamilia, IBM WebSphere general manager, said in a statement. "ILOG's software allows businesses to more effectively manage and automate the decision making process."

With its ILOG acquisition, IBM is reaching for a vendor that its competitor SAP uses and one in which SAP, at least in the late 1990s, had a 5 percent stake.

Last year, SAP accounted for 3 percent of ILOG's total revenue, making it the largest customer for the French company, according to ILOG's 2007 proxy statement.

Big Blue has no plans to cut off that relationship and tell ILOG customers which software vendor they will now have to use, said an IBM spokesman.