Tuesday, March 07, 2006

VDC's View Telelogic - I-Logix

The acquisition of I-Logix represents a continuation of Telelogic’s strategy to acquire leading companies in their respective corners of the application lifecycle management business. These acquisitions include:

Popkin (2005) - leader in enterprise architecture modeling (cost: $45 million)

QSS (2000) leader in requirements management tools (cost: $115 million)

Continuus (2000) leader in change and configuration management tools (cost: $42 million)

Other acquisitions include Verilog (SDL), COOL:Jex from Sterling Software (UML), Focal Point (decision management tool), Devisor (consulting) and Certeam (consulting)

Key observations:

I-Logix Rhapsody is likely the best-in-class software modeling tool. The acquisition brings another best-in-class tool into the Telelogic line continuing its successful acquisition strategy.

Telelogic’s transition from SDL to UML modeling has not been an easy one. While Telelogic has enjoyed great success in telecom, its move into other vertical markets has not been as successful. The acquisition brings instant credibility to Telelogic in the automotive, military and aerospace, medical and consumer electronics verticals.

The acquisition establishes the best-positioned modeling company in the embedded business from safety-critical, real-time applications to large systems architecture. The combination of Telelogic, I-Logix and Popkin is the “perfect storm” of software and systems modeling.

The acquisition brings together Telelogic’s strength in building product portfolios with I-Logix’s award winning product strategy. The key component that has been missing for Telelogic in its modeling products for some time.

This acquisition does not sacrifice the innovative relationship that I-Logix has established with Green Hills, which features a tightly integrated IDE/modeling environment.

I-Logix is also working on a partnership with Esterel Technologies to integrate Esterel SCADE certified code generator into Rhapsody. The result for military and aerospace customers could be a near-seamless experience from DOORS to Rhapsody to SCADE Qualified Code Generator (KCG) to Green Hills MULTI (certified by Esterel’s compiler certification tool), all running atop Green Hills’ INTEGRITY OS. Additional support comes from Enterprise Architect and SynergyCM. In addition to the end-to-end nature of the tool chain and the efficiencies of modeling, the benefits of this approach include compiler optimizations for faster, smaller code that is in essence certified by virtue of being generated by the certified code generator. VDC expects that other vertical markets will find this configuration appealing as well.

Bottom line: This is an important acquisition that benefits customers in a meaningful way while at the same time changing the competitive landscape of the industry. This is now clearly a 2-company market and Telelogic has the momentum.