IBM's $865 Million Micromuse Acquisition Aims To Take On Network Complexity

IBM on Wednesday announced it will pay $865 million in cash to acquire network management software vendor Micromuse Inc., which will be integrated into IBM's Tivoli software portfolio.

IBM says the acquisition will merge two growth businesses: IBM's systems management unit, which has had double-digit growth through the first three quarters of this year, and Micromuse, which had 10% growth and $160 million in revenue in its fiscal year 2005, which ended in September.

"This is a combination of winners," said Al Zollar, general manager of IBM Tivoli software, during a conference call. "Today's networks have to support dozens of sophisticated application and services. The integration of voice, video, and data traffic must be done without sacrificing performance. Micromuse's technology helps monitor, manage, troubleshoot, and simplify complex networks of all types."

Micromuse has about 1,800 customers, including America Online, British Telecom, eTrade, NCR Corp., and the U.S. Securities and Exchange Commission. The acquisition is expected to be completed in the first quarter of 2006.