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Encentuate acquisition is a win-win for IBM

Purchase of identity specialist is a good one and shows that IBM now seems to be operating with a culture of constant improvement, says analyst Jon Oltsik.

This week, IBM once again added to its deep security portfolio by acquiring identity specialist Encentuate for an undisclosed amount. I like this deal for two reasons:

• 1. Many of the identity management tools were built when users were bound to desktops within the enterprise. Encentuate is one of the new breed of identity management vendors with products that map more to today's needs for strong security, auditing, support for mobility. Companies like Encentuate have effectively reinvigorated the identity market with systems that fit today's business needs and don't require an army of consultants for product implementation and customization.

• 2. Before this acquisition, IBM could point to its Tivoli identity management portfolio and match Encentuate on product functionality. Yet, IBM decided that it made better business sense to simply replace its legacy code through an acquisition than enhance its existing wares. This shows some real guts on IBM's part. IBM made sure to reassure existing customers that it will integrate Encentuate into its current portfolio over time to provide them with a smooth transition.

For Encentuate, this acquisition proves that there is still plenty of upside for venture-backed technology start-ups that pick the right market opportunities and execute on their product development and business plans. For IBM, the days of force-fitting products into the market are long gone. IBM now seems to be operating with a culture of constant improvement, regardless of whether this progress comes from within or outside of the company.