IBM has completed its purchase of ILOG, the Paris-based business rules engine maker, which is expected to equip IBM with automated process intelligence for its business process management products.

IBM paid $340 million for ILOG, the leader in the business rules engine market. Market researcher IDC reported last fall that ILOG had displaced Fair Isaac, the business rules-based credit-checking system, as the dominant rules engine supplier.

In addition to monitoring complex business events in software, something it already does, IBM will use ILOG to seek to let business managers react to those events, as business needs dictate. With ILOG and an earlier AppSoft acquisition, IBM has been positioning itself to strike out into a new field, business event management, where a business process or series of processes are automatically monitored over time, then responded to by management.

"We felt we could address a gap in the market" between managing separate business processes and monitoring complex events, said Kramer Reeves, IBM's manager of business process management product marketing, in an interview last November.

"Business event processing is the next generation. We're extending the capabilities of the business user to allow him to detect events, define a response, and take action on business developments," he said at that time.

Business rules engines allow business users to construct if-then statements, such as, if a certain condition is encountered, then take this action. In IBM's view, skilled business users will be able to write business rules, fired by the rules engine, that change the way business systems operate, without waiting for applications to be reprogrammed.

No product announcements followed today's acquisition, but an IBM spokesman said adding ILOG to its portfolio will allow IBM business process monitoring systems "to apply mathematics and computer science" to business process management.

IBM acquired AppSoft last spring. It previously had a toe in the business process management market with WebSphere Event Broker, WebSphere Enterprise Service Bus, and WebSphere Process Server.

"None of these products amounted to a real strategy. We didn't have tight engineering, focused on business event management," conceded Reeves.

Complex event processing is a relatively new field, with startups such as Coral8 and Streambase offering complex event monitoring engines that can watch for discrete events in enterprise infrastructure processing over a defined time period. Oracle as well as IBM has entered the field.

IBM plans to build out what Reeves called a WebSphere Business Service Fabric, or suite of products capable of monitoring and managing business events.