By William Trent, CFA of Stock Market Beat
IBM is looking to better meet the needs of wireless service providers with its planned purchase of network performance monitoring and service management software vendor Vallent.
IBM announced Tuesday its intention to purchase privately held Vallent for an undisclosed sum. The vendor hopes to close the deal, subject to regulatory approval, in the first quarter of calendar 2007. At that point, IBM will fold Vallent into its Tivoli Software systems management business unit.IBM plans to add Vallent’s software to the Netcool products it gained through the $865 million acquisition of network management software vendor Micromuse, which closed in February.
Database rival Oracle (ORCL) has also been bulking up to serve telecom customers. Provided IBM and Oracle can integrate the businesses properly, we think consolidation is good for the software industry and its customers.
The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Intuit (INTU) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Lion’s Gate (LGF); Three Five Systems (TFS); Adobe Systems (ADBE) call options; IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Ceradyne (CRDN) put options; Lion’s Gate (LGF) call options; Dell (DELL) put options; Plantronics (PLT) put options
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