Rocket Software Buys iCluster HA Biz From IBM

January 9, 2012 Timothy Prickett Morgan

The high availability software market in the IBM i space is getting off to an interesting start in 2012 now that Rocket Software has bought the iCluster software business from IBM. The deal was announced on January 4, but was actually closed by Rocket Software and IBM on December 31 for an undisclosed sum, and it puts iCluster logical replication software in the hands of a third party that plans to invest in the product and grow the business.

Rocket Software has been on an acquisition tear in the IBM space for the past couple of years, having snapped up application development tool maker Seagull Software in December 2006 for $55.7 million, which gave the company its LegaSuite tools as well as the BlueZone terminal emulators that are now the Rocket Seagull and Rocket BlueZone divisions at the company. (Seagull itself had only acquired BlueZone in March 2006.) In October 2009, Rocket Software raised a chest full of $91.9 million in equity cash to do acquisitions, which was only a month after Rocket Software had paid an undisclosed sum to buy the U2 database and application development tool business from IBM. In March 2011, Rocket Software bought Aldon, a maker of application lifecycle management and compliance tools that run on the IBM i, from Marlin Equity Partners, which had acquired Aldon from its founders in May 2007.

Under the terms of the deal between IBM and Rocket Software, all of the employees working on iCluster software within IBM’s Power Systems Software division will be making the jump to Rocket Software, including Mike Warkentin, who is the lead on the iCluster team. The majority of the iCluster team is still located in the Markham, Ontario, suburb of Toronto, where DataMirror, the creator of iCluster, was located when it was founded and when it was acquired by IBM back in July 2007 for $161 million.

DataMirror was founded in 1993 by Nigel Stokes, who was the company’s CEO and chairman and who took the company public on the Toronto Stock Exchange in 1996. DataMirror grew to be one of the big three in the AS/400 high availability software clustering market, alongside the original Vision Solutions and Lakeview Technology, which were merged a few years back by private equity firm Thoma Bravo in the wake of its acquisitions of Vision and iTera. (DataMirror once tried to do a hostile takeover of Vision Solutions, providing much drama for the AS/400 community of the time. The attempt failed.)

At the time of the DataMirror acquisition, IBM made no secret that it was more interested in the Transformation Server database replication software that DataMirror had created than the iCluster HA software. That software lives on inside of IBM’s Information Management division inside of the Software Group behemoth and has been integrated with various database and integration tools that Big Blue created and acquired over the years. At the time IBM bought DataMirror, it had around $45 million in annual sales, about 2,200 customers, and 220 employees.

Neither Rocket Software nor IBM wanted to talk about the revenue stream and the customer base size of the iCluster product as 2011 came to a close. Ahead of the deal, Rocket Software had around 900 employees and more than $200 million in annual revenues. Rocket is privately held, so it does not provide an insight into its financials. The company has now done a slew of acquisitions of public and private companies, not including intellectual property and asset acquisitions since it was founded in 1990 by Andy Youniss, who is still its president and chief executive officer, and a silent equity partner who is active in the company today.

Rocket Software will add the iCluster software to its portfolio of products sold from the Storage, Networks and Compliance business unit, which includes a number of storage and data archiving products. These include various archiving tools for Linux, Unix, and Windows platforms sold under the Arkivio brand (acquired in January 2008), the Mainstar hierarchical storage management software for IBM mainframes, and the Servergraph chargeback software for tape and offsite media storage.

“Rocket Software has done over 30 acquisitions in the past number of years, and has a history of acquiring growing businesses and growing them, and that’s our intention with iCluster,” Brian Starr, vice president and general manager of the Storage, Networks and Compliance business unit, told The Four Hundred. “We intend to invest in and grow the business, and we intend to have a very competitive offering.”

In addition to investing in the iCluster software to help boost its customer base, Starr says that there are some synergies between existing Rocket Software replication and archiving tools in the unit and the company obviously intends to cross-sell iCluster into Aldon, BlueZone, and LegaSuite accounts.

One interesting possibility, and one that IBM never got around to doing with the iCluster software, is to port the code so it works with Linux, Unix, and Windows platforms, much as other tools do in the SNC business unit where iCluster now lives. Starr would not comment on that possibility.

When I asked Ian Jarman, manager of Power Systems software at IBM, if Big Blue had ever thought of porting iCluster to AIX and Linux, he reminded me that what IBM did instead is transform its High Availability Cluster Multiprocessing (HACMP) hardware clustering for AIX into PowerHA and port it to run on IBM i. IBM never did do logical replication for AIX, but there are a number of third-party tools that do.

Jarman says that in the wake of the acquisition of iCluster by Rocket Software, iCluster will still be sold through the IBM channel during the transition period and that the two are working together to make sure iCluster customers are properly supported. IBM has been doing Level 1 support for iCluster out of the Rochester labs and Level 2 out of the Toronto labs where the iCluster people work. Eventually, Rocket Software will be taking all the iCluster calls and IBM will just take the calls for the IBM i platform itself.