IBM Corp has scored a deal to supply Nortel Networks Corp with an estimated $20m of software over the next five years, thanks largely to its $865m acquisition of Micromuse Inc last year.
IBM is effectively reselling Micromuse’s application management technology to Nortel, providing customers of the telecom equipment manufacturer with high-bandwidth network management, monitoring and alerting capabilities.
Micromuse specializes in the development of network performance diagnostic software that IBM has now tapped to boost the data, voice and video management capabilities of its Tivoli infrastructure software suite. Micromuse’s technology extends IBM’s self-managing autonomic capabilities when combined with its security management software for identifying attempted network breaches.
Micromuse is now part of IBM’s Tivoli business units and its products have been re-branded and added to the Tivoli range and sold through IBM’s sales channels and business partners.
Specifically Nortel is embedding Micromuse’s Tivoli-branded Netcool software as part of its new Common Management Platform for greater network security and control capabilities.
The first service based on IBM’s technology is a Metro Ethernet application that allows operators to meet service level agreements.
The deal is part of IBM’s Inside model which is similar in concept to OEM deals struck by hardware vendors like Intel Corp, which embeds its chips into other products. The only difference is that it involves software that is embedded in larger programs sold by other software makers.
IBM is selling the software to Nortel under an Nortel label, which represents a less subtle IBM Inside branding than Intel.
Nortel used to develop much of its own software before the telecom sector nose dived in the early part of this decade. After firing most of its engineering staff Nortel suddenly found that it couldn’t develop all the software it needed to run its telecoms hardware and has subsequently turned to partner technologies.
IBM’s software group is now the fastest growing division in IBM and pulled in around $18.2bn of revenue last year. The company did not say how much of that revenue came from OEM sales, but an official said that it is experiencing double-digit growth.
Other notable OEM software customers for IBM include Pioneer Electronics, which embeds IBM’s speech technology into its products and Avaya, which integrates IBM Lotus Notes into its messaging management infrastructure.