IBM Buys Green Hat, Who's Next?

Acquisition of apps testing company, and a management shuffle, mark new CEO Ginni Rometty's first moves. Now the question is whether more small buys are ahead--or a megadeal.

Paul McDougall, Editor At Large, InformationWeek

January 4, 2012

3 Min Read

100 Years Of IBM: 25 Historic Milestones

100 Years Of IBM: 25 Historic Milestones

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IBM said Wednesday that it has reached a deal to acquire Green Hat, a seller of tools and services that allow software developers to test their applications in the cloud prior to shipping.

Terms of the deal, the first announced by IBM under new CEO Ginni Rometty, were not disclosed.

Green Hat's offerings are designed to save software developers the time and expense of building their own quality-testing labs, a process that can consume as much as half of a development budget. Instead, they can use Green Hat's cloud-based systems, which simulate a number of common test environments for products aimed at Microsoft, Oracle, SAP, IBM, and other platforms.

Green Hat's customer roster includes numerous major companies, including JP Morgan, Credit Suisse, BP, T-Mobile, and British Airways.

[ For more on IBM's plans, see IBM Eyes Broader Acquisition Strategy. ]

IBM will add Green Hat to its Rational tools and services group. "This acquisition extends IBM's leadership in driving business agility and software quality by changing the way enterprises can manage software development costs, test cycle time, and risk," said Rational general manager Kristof Kloeckner, in a statement.

IBM has publicly committed to spend roughly $20 billion on acquisitions through 2015. Last year alone, the company announced or completed buyouts of several software companies, including the $387 million acquisition, made public in September, of risk analysis specialist Algorithmics. Also since January 2011, IBM has inked deals to acquire Tririga, i2, Q1 Labs, and private-cloud developer Platform Computing.

The big question is whether it will continue to build its portfolio through buyouts of small and mid-market players, or make a major move into the enterprise resource planning (ERP) and customer relationship management (CRM) domains through a megadeal with an industry giant such as Germany's SAP, long thought to be a possible target for one of tech's major conglomerates.

The answer to that question now lies with Rometty, who took over from former IBM CEO Sam Palmisano on Jan. 1. Rometty is beginning to make her mark on the company.

She has tapped growth markets chief Bruno Di Leo as senior vice president for sales and distribution and North America sales leader Bridget Van Kralingen to head up Big Blue's key business consulting unit, which Rometty herself previously led. Moving into the growth markets portfolio is senior vice president James Bramante. Bramante "was instrumental in IBM's integration of PwCC," IBM noted in an internal memo announcing the moves, obtained by InformationWeek. IBM acquired PwCC, or PricewaterhouseCoopers Consulting, in 2002 for about $3.5 billion.

IBM shares were off .42%, to $185.52, in afternoon trading Wednesday.

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About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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