James Governor's Monkchips

Are software megadeals coming back? Rational/Novell

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It has been an assumption in recent years that enterprises are no longer willing up to stump up for the kind of upfront software megadeals which were so common during the late 1990s, which is why I took particular note when Danny Sabbah, Rational’s general manager told a group of industry analysts at IBM’s annual SWG annual conference in Rye Town New York yesterday (of which more, later) that Big Blue’s software and systems governance arm had just signed an $11m deal with a large insurance company.
$11m dollars to standardise software development and portfolio management tooling sounds like a lot until you consider both the potential business benefits in terms of rolling out new services quickly, and the potential penalties for poor operational controls in a heavily regulated industry.
This was the biggest contract win for Rational since it was acquired by IBM three years ago. Good job Danny and team.
I would have just mentally tagged the news “Rational Progress” (again, of which more later), but when I arrived back in the office this morning I found news in my inbox of a Novell deal at the UK Department of Health, for security and identity management software, worth 22m quid. That is just under $40m. Nice work if you can get it.
One point to note in terms of Novell’s deal is the explicit endorsement of its open source strategy by the chap in charge, Richard Granger. He said:
 “This deal with Novell also reduces the barriers for the NHS in using Open Source, as it secures access to an enterprise class Open Source platform along with, more importantly, affordable support, maintenance and training to help our NHS staff make the transition.”
So are corporate purse strings loosening, or are these isolated incidents? Are these deals signs that firms are investing heavily in infrastructure in order to build out service oriented architectures? What is the story? I am not sure yet, but obviously it would be cool if you noted other recent megadeals in the comments below if you know of any.
I should point out that the DoH deal is part of the rather extravagant National Health Service infrastructure refresh project, which is exceptional in scale. The announcement is at least partly spun as a renegotiation to save money, just as when Granger cut a deal with Microsoft.
Whatever way you look at it, some folks at Novell and Rational will be enjoying well deserved Christmas bonuses.

transparency notification: IBM SWG is a client.

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