Chicago – When Armonk, N.Y.-based IBM began its $340 million cash tender offer to acquire Paris technology solution provider ILOG earlier this month, it may have received a hint that ILOG was about to be named a leader in its field: business rules management systems and rule engines for managing business change and process improvements. ILOG earned that honor in a report published by analyst firm IDC, “Worldwide Business Rules Management Systems 2008-2012,” and with it, essentially confirmed IBM’s goal to build the highest-quality suite of products in the business process management (BPM) space.

IBM has had its eye on BPM—the systems that drive business rules—for some time. The company acquired FileNet in 2006, and earlier this year acquired AptSoft (a privately held company).

IBM’s plan is to build ILOG’s technology into its own WebSphere product, and has noted ILOG’s propensity to apply "business rules" to corporate computer systems as the reason. With the ILOG acquisition comes more than 3,000 customers, many of which are insurers.

IBM is growing its BPM offering by design. With its ability to plan, monitor and analyze a variety of business processes that may be underperforming or inadequate, BPM is already being touted as one of the key technologies in our current economic climate. IDC reports that the BPM market is growing 44% each year, and could grow to a $5.5-billion market by 2011.

The hot BPM market has seen its share of M&A activities. Oracle acquired BPM technology provider BEA systems earlier this year for approximately $8.5 billion, and last year, SAP purchased Yasu Technologies for an undisclosed amount.

Source: ILOG, IBM, The Street

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