Merger fallout: ILOG supply chain customers welcomed into the "IBM family"

Even though its new parent company is known more for supplying IT infrastructure products—rather than business applications—ILOG says it will not abandon users of its packaged supply chain management solutions. In fact, company executives say being part of IBM will allow ILOG to deliver more product enhancements—and offer a higher level of service—than it could as an independent company.<br/>

02/13/2009



Even though its new parent company is known more for supplying IT infrastructure products—rather than business applications— ILOG says it will not abandon users of its packaged supply chain management solutions. In fact, company executives say being part of IBM will allow ILOG to deliver more product enhancements—and offer a higher level of service—than it could as an independent company.

That was one of the primary messages delivered at the recent ILOG user conference, the first since IBM’s acquisition of ILOG became official.

IBM announced its intent to purchase ILOG in July 2008. The $340-million deal was completed January 6, 2009, exactly six weeks before the start of the ILOG’s annual user conference, which took place in Orlando February 3-5.

“We pursued ILOG for all four of its product lines,” says Tom Rosamilia, GM of the Application & Integration Middleware Division within the IBM Software Group . “We have no intentions of sun-setting anything.”

That would be good news for users of ILOG’s packaged supply chain applications, which include solutions for:

• Designing supply networks;

• Planning production schedules;

• Managing the flow of inventory; and

• Coordinating transportation plans.

All of ILOG’s supply chain applications employ sophisticated “optimization engines” that help users determine the most efficient ways of executing these business functions given current market conditions.

The same underlying optimization technology powers ILOG’s other product lines:

• A suite of products for creating and managing rules for executing business processes;

• A tool set for developing custom applications for optimizing business processes; and

• A visualization tool set that enables the creation of user interfaces for either developing new processes or managing existing ones.

Initial media reports about the merger identified the business rules management products—specifically a tool called JRules that caters to Java-based developers—as the only part of ILOG that IBM would deem valuable. Several media member raised that point again at the ILOG conference, but IBM execs continued to shoot it down.

View video: ILOG Chief Scientist David Simchi-Levi says being acquired by IBM will allow ILOG to enhances its portfolio of supply chain applications.

From an organizational standpoint, ILOG has been placed within IBM’s WebSphere group, which includes solutions for integrating applications and creating new business processes. In an interview with Manufacturing Business Technology , Rosamilia, who oversees the WebSphere product line, said ILOG is an ideal fit for this group because IBM and ILOG partnered numerous times over the years to create solutions involving the use of business rules technology.

“But I also have responsibility for industry frameworks and the RFID business,” Rosamilia added. “The [ILOG] supply chain and optimization assets fit very nicely into our industry frameworks, and RFID fits nicely with supply chain solutions as well. So while the ILOG products will be part of the WebSphere group, they will be happily shared with the entire IBM family.”

David Simchi-Levi, ILOG’s chief scientist, says existing ILOG supply chain customers can expect the merger to bring added capabilities—starting with enhancements to ILOG’s sales & operations planning solutions—as well as a higher level of customer service.

“ILOG had a relatively small number of consultants,” Simchi-Levi says “Now, together with IBM, we can support customers with thousands of consultants focusing on different levels of supply chain challenges, in areas where we did not necessarily have expertise before but customers would like us to help them with.”





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