IBM continues to be aggressive with acquisitions, grabbing BigFix today for an undisclosed amount. Given BigFix’s aspirations (they were moving toward a public offering), I’m a bit surprised the economics weren’t disclosed, but it was likely a decent sized deal.
IBM and BigFix have a fairly long history of working together, and strategically this deal makes a lot of sense – especially given that IBM’s Tivoli systems management offerings weren’t very competitive on the endpoint. Once we got past the “Smarter Planet” branding hogwash on the analyst conference call, the leverage of IBM/BigFix became apparent. First, BigFix always positioned itself as a platform, driven by content and their Fixlets: applications that plug into the platform. You have to figure the IBM Global Services folks are drooling a bit to finally control an endpoint management integration platform – and the billable hours to build thousands more Fixlets.
BigFix as a stand-alone company wasn’t a long-term option. Small companies don’t get to play in the platform space, not over long periods of time anyway. But hats off to the BigFix folks – they focused on bringing specific use cases to market to show the power of their platform and knock down some big enterprise deployments. On the other hand, IBM is strictly a platform player, so the idea of Big Blue rolling out a comprehensive endpoint management offering is a no-brainer.
If anything, this solves a big operational problem for IBM, given their 500,000+ employees around the world (they plan to eat their own dog food with an enterprise-wide deployment) and millions of endpoints managed through their outsourcing business. From that perspective, this is very much like the HP/Opsware deal a few years ago. Yes, the deal gets justified by the big opportunity to sell the software, but the internal operational leverage of the technology is a big sweetener (and likely a deal size multiplier).
Additionally, IBM needed to make a move to bolster their security product capabilities, which are getting a bit long in the tooth. They’ve seen the former ISS erode to irrelevance; they moved the ISS products into the Tivoli group, but it’s too little too late. With BigFix they ger an opportunity to bring a far more strategic offering into the bag. Symantec has this capability through their Altiris acquisition and EMC/RSA bought ConfigureSoft a while back to get better endpoint management. You have to wonder if McAfee was a player in this deal, because they’ve got a big hole in their offering around endpoint management.
If you are a BigFix customer, you likely have mixed feelings. Now you get to deal with IBM, which can be a nightmare. And if you have a very heterogenous environment, over time that is at risk. Of course, both IBM and BigFix will maintain their commitment to supporting a heterogeneous world, but you figure IBM platforms will get priority for new features and Fixlets. That’s the way of the world.
IBM outsourcing customers should be tickled. If you can get an endpoint change request through the gauntlet of change orders, contract (re)negotiations, and the other roadblocks IBM puts in your way, they’ll actually have a slick way to make the change. This also adds a number of other cool service offerings (energy management, endpoint remediation, asset management, etc.) that may actually add value to your services relationship. Imagine that.
Obviously you’ll see all the competition, both big (Symantec, RSA, HP) and little (LanDesk, Lumension, Shavlik) throw some FUD (fear, uncertainty, and doubt) balloons your way during the procurement process. Clearly there will be some impact to the product roadmap, and likely support, as the newly wealthy BigFixers move on and Tivoli starts putting their imprint on company operations. If anything, you should be able to use the FUD as more leverage to get additional pricing and T&C concessions when negotiating your purchase or renewal.
Like any other deal, most of the risk is in integration. Can IBM maintain the people and continue to drive the product to take advantage of the leverage they just paid for? I can say I was impressed with the three-phase integration plan IBM presented during the analyst call. The first phase is to get more exposure for BigFix within the customer base and good things should happen. After that, they integrate with the existing Tivoli stuff from a product and console standpoint.
Given the existing relationship, the integration issues are somewhat manageable. That doesn’t mean they don’t exist or that IBM won’t screw it up – just ask ISS about that. But given the work already done to drive integration (you’ve got to figure the deal has been in the works for a while) and the existing partnership, they have done what they can to contain the risk.
The only outstanding question is how much of a premium did BigFix cost? From almost every other standpoint the strategic rationale of this deal is strong and even the issues are not that big. This likely means other big Security/IT companies (think McAfee, BMC, Oracle, etc.) need to grab some real estate in the endpoint management space. So not only is this a good day for the folks at BigFix, but Shavlik, Lumension, and LanDesk (once their emancipation from Emerson goes through) are well positioned to be next.