In the aftermath of IBM's announcement of intent to buy Ilog, it would be all too easy for us to reflect back on a conversation with Ilog's CEO Pierre Haren last winter at its annual user conference covering survival in the software industry. Haren's description of the typical life of a software vendor is that first you get a handful of successful references, then replicate to at least 20 to 30 successful accounts, then you start thinking about what your company wants to do when it grows up. Start specializing your solution for vertical sectors or other specialized sectors of the market, or you must change your role and move on. Haren's implicit message: eat, or be eaten.

We won't take the cheap shot about IBM swallowing up Ilog, because this deal makes too much sense.

Having been partners in one way or another for about a dozen odd years, both companies know quite well that Ilog's business rules engine fills a key gap in the WebSphere Process server BPM line, and most notably, that we saw IBM's SOA strategy VP Sandy Carter keynote Ilog's conference. IBM's not going to haul out the big guns for any sub-$200 million software company.

Ilog has had a case of multiple attention disorder for a number of years. Otherwise, how could you explain that a company of Ilog's size would have not one or two, but three separate product families that targeted almost completely different markets? Or that a $180 million company could support 500 partners? Ilog was best known to us and the enterprise software world as one of a handful of providers of industrial-strength business rules management systems. That is, when your rules for conducting business are so conditional and intertwined, you need a separate system to keep them from gumming up into a hairball. That condition tends to typify the world's largest financial institutions. That's enough for one business.

But Ilog had two other product lines, one of them being an optimization engine that was OEM'ed to virtually every major supply chain management vendor, from SAP and Oracle to i2, Manugistics, Manhattan Associates and others. And by the way, it also had a cottage industry business selling visualization tools to ISVs.