13 December 2002 Rumours are mounting that software giant Microsoft is preparing to gatecrash IBM’s $2.1 billion deal to acquire tools vendor Rational, which was agreed last week.

Rational had been a close partner of Microsoft – as well as IBM. The popular Rational Rose development tool integrates closely with IBM’s WebSphere application development and deployment suite, hence the IBM acquisition.

However, Microsoft had also been working with Rational to integrate Rational Rose tightly with its Visual Studio.Net suite and was regarded as an important element in Microsoft’s .Net web services strategy – particularly for taking the technology into the high end of the market.

Microsoft has publicly insisted that the loss of Rational to IBM will not have an impact on its plans. But Dale Fuller, CEO of rival Borland, has been more forthcoming. “As a customer, it’s taken away my ability to use the industry standard development platform [Rational Rose],” said Fuller.

While Borland would continue to support Rational Rose, he doubted that it would be possible to achieve such tight integration between Borland’s products and Rational Rose. This is because IBM would have its own plans to integrate it tightly with the WebSphere suite.

Recent Securities and Exchange Commission (SEC) filings imply that Microsoft and Rational were in acquisition talks in August, according to news wire reports, but that a bid was never formally submitted.

At the same time, Borland has also been at the centre of a Microsoft takeover rumour, with the design and modelling tools it acquired when it bought TogetherSoft in October thought to be the target. However, because the two companies compete so closely in the Microsoft Windows tools market, such a deal might face scrutiny from antitrust authorities in the US.