Brussels, 3rd October 2007
Competition Commissioner Neelie Kroes said: “After this transaction IBM would become by far the largest vendor of software development tools for software modelling and for requirements management. It is the Commission’s duty to thoroughly analyse the effects of such a transaction and to ensure that it would not harm competition (in the software development tools sector".
IBM is active worldwide in the development, production and marketing of a variety of information technology (IT) products, software and services. As part of its diverse software activities, IBM develops and sells software development tools. Telelogic is a Swedish software company.
An initial market investigation revealed strong indications that the market for software development tools may be divided into narrower product markets based upon the functions of the relevant tools. The Commission has identified competition concerns with regard to two of these product markets: software modelling and requirements management tools. In these markets IBM and Telelogic are direct competitors and are the leading vendors world-wide. The combination of these two companies could have adverse effects on competition and, inter alia give the merged entity the ability and incentive to slow down innovation and interoperability with tools from third party vendors.
Based on these findings, the Commission decided to open a second phase investigation in order to carry out an in-depth assessment of the effects of the proposed transaction. Modelling tools are designed to help software developers model the software before developing it. The software's functions are mapped out by creating visual models as well as by generating data definitions, programming specifications and ultimately the software code itself. Requirements management tools are designed to streamline and document a development team's analysis of the requirements.
More information on the case will be available at: