IBM Scoops Up TrelliSoft; Sells Off Its Telecom Billing Platform

If Big Blue's recent software deals are any indication of things to come—telecom billing systems are out and storage resource management software is in.

by Michael Singer and Brian Morrissey of internetnews.com [September 3, 2002]

IBM was busy last week. On Thursday, it struck a deal to acquire TrelliSoft, a maker of storage resource management software. On Friday, the company struck a deal to sell its telecom billing platform to CSG Systems for an undisclosed amount.

The Armonk, N.Y.-based giant said this is one of the last asset sales the company has planned as part of its recent cost cutting.

Englewood, Colo.-based CSG's products set up customer accounts, process orders, manage invoices and perform marketing analysis. The company's customers include AT&T, (which makes up more than half of its sales), AOL Time Warner and Cox Communications. The company has been expanding its core processing business through acquisitions, including its $260 million purchase of Kenan, the customer care and billing business of Lucent Technologies.

Under the agreement, CSG said it will work with IBM to boost Kenan's billing platform along with its CSG Data Mediation solution to support IBM eServer pSeries systems, which run on the UNIX operating system. Similar computers from Hewlett-Packard and Sun Microsystems also run CSG software.

In addition, CSG and IBM will work together on customer care and billing outsourcing opportunities that require data center hosting facilities in Europe, the Middle East, Africa and Asia Pacific regions.

"Today's alliance with CSG provides existing ICMS customers, as well as other service providers, with world class customer care and billing solutions," said Rich Stomp, vice president, IBM Telecommunications Industry . "We look forward to further enhancing our relationship with CSG to offer service providers around the world the best in IBM technology and services coupled with leading CSG solutions."

Big Blue said the transaction is part of its strategy to migrate its indigenous applications to independent software vendors (ISVs) and then go-to-market.

"We believe that the ICMS customer base will benefit greatly from being served by a company whose sole expertise is in the customer care and billing industry. We welcome these customers to the CSG family," said Bill Fisher, president of CSG's Global Software and Services Division.

Eventually, the ICMS platform and its customers will be part of CSG's Global Software and Services Division, joining CSG Kenan/BP and other CSG software solutions. Under the agreement, CSG will contract with IBM to continue to provide ongoing maintenance and support to ICMS customers.

CSG said it also plans to seek compliance with the IBM Service Provider Delivery Environment (SPDE), an open standards based architecture built on IBM's WebSphere e-business infrastructure software.

The agreement will help CSG give its wired and wireless service providers the ability to introduce new revenue generating voice, text and Internet-based services.

Storage shark
Looking to bolster its storage offerings, IBM last week struck a deal to acquire TrelliSoft, a maker of storage resource management software.

The deal to buy the Glen Ellyn, Ill. company will give IBM a storage resource management (SRM) product geared to Java and Web-based storage supporting a variety of platforms, including Windows and open-source alternatives. TrelliSoft will be integrated with IBM's software group, with its products available immediately from Big Blue's Tivoli Software division.

Financial details of the transaction were not disclosed.

"Our customers have asked us to help manage their storage the way we've enabled them to manage their systems," Robert LeBlanc, general manager at Tivoli Software, said in a statement. "This enables customers to more effectively and efficiently manage their storage resources, and, as a result, improve their return on investment."

SRM software is used as a dashboard, giving companies an automated tool set to tweak the storage infrastructure by adjusting capacity, availability, performance, and asset management.

IBM's push comes as the storage management sector bucks downward trends in IT spending, capitalizing on companies' realization of the need for data storage and backup. IBM is battling storage incumbents such as EMC and Veritas for the lead of the lucrative storage market. According to research done by Aberdeen Group, the need for storage capacity grows at a clip of 37 percent a year, as IT systems become ever more complicated and pervasive.

Gartner Group estimates the storage management software market was worth $6.6 billion last year, and forecast the market to top $16.7 billion in 2005, driven by enterprises' desire to wring more productivity out of fewer resources in times of fiscal restraint.

TrelliSoft will join SRM products IBM had under development, giving the company's Tivoli unit SRM software proven in the market.

"Customers and partners will see a significant benefit to their businesses with the addition of IBM's development and distribution strength," said Stephen Donovan, TrelliSoft's CEO.

Earlier this summer, IBM made a big splash by introducing two new versions of its Shark storage servers, boasting they would double the storage server's performance while slashing data processing costs in half.

In the midst of pervasive IT gloom, Big Blue is also crowing about its deal with General Motors to buy 10 high-powered Unix computers that will be linked to form one of the world's top supercomputers.

— End