IBM bought Cast Iron Systems for what looks like an undisclosed amount of cash today. That’s big news if you are an AppExchange product vendor specializing in integrating with legacy systems like ERP and some CRM. Cast Iron has been the g-to company for effecting these integrations and grew prosperous doing them.
That IBM saw a need to have Cast Iron in its stable of software companies says a lot about the growing popularity of and necessity for SaaS based business software. We all know that integration with legacy systems can be a bear and for IBM a company with significant services exposure to make this acquisition speaks directly to the popularity of new-style SaaS over legacy computing.
I didn’t see any discussion of how the deal was financed whether by stock, cash or some combination. Nonetheless, it would appear, at least at this point, that Cast Iron will still be expected to do a good deal of business with companies implementing the likes of Salesforce.com and RightNow. Hence my instinct that the purchase says a lot about these SaaS companies as well as Oracle CRM On-Demand, NetSuite and almost any other SaaS company that needs to integrate with legacy systems.