Big Blue to buy Candle Corp. for mainframe management

IBM Corp. announced Thursday morning that it will buy Candle Corp., a well-known mainframe management software vendor with 3,000 customers worldwide.

IBM said in a statement that it plans to use Candle’s software to round out its management software offerings for infrastructure and applications as it pushes its “on-demand” strategy.

“Candle brings award-winning infrastructure management expertise and technology to the IBM software portfolio,” Steve Mills, senior vice-president and group executive of the IBM Software Group, said in the statement. “Together, we will provide customers with powerful capabilities for managing end-to-end infrastructure, processes and applications, which are key requirements for the on-demand operating environment.”

El Segundo, Calif.-based Candle has developed an extensive set of infrastructure management products covering a wide range of hardware and software, including IBM’s DB2, Lotus, Tivoli and WebSphere software, as well as zSeries, Linux, Unix and Windows platforms.

Financial details about the acquisition weren’t disclosed by the companies, but Jean-Pierre Garbani, an analyst at Forrester Research Inc. in Cambridge, Mass., pegged the purchase price at US$350 million, a figure he attributed to industry sources. The Candle acquisition will give IBM mainframe management capabilities that will “cause a lot of trouble” for competitors such as Computer Associates International Inc. in Islandia, N.Y., and BMC Software Inc. in Houston, he said.

IBM began adding mainframe management to its Tivoli line two years ago, but the Omegamon product line from Candle is respected and widely used, Garbani said. “Candle has an excellent reputation in the market,” he said.

The deal is expected to close in the second quarter, IBM said.

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