IBM Extends Shopping Spree

IBM said it also plans to integrate ISS' software unit with IBM's Tivoli's division which includes software for identity management, access management, Service Oriented Architecture (SOA) security and security information management.

Jaquith says that move is logical but wondered "whether the specialization that ISS has developed (in that area) will survive unscathed." ISS has a strong focus on research and development, too, and he worries about talent flight.

Big Blue shareholders were pleased with the deal.

"We think it's a good acquisition for IBM," says Kim Caughey, senior equity research analyst with Fort Pitt Capital Group, which holds IBM shares. "It certainly does seem like they are really trying to pump up the system and network management area now."

"In the past, they have shown that they can integrate companies well and get value out of the acquisition," she added.

The transaction is expected to close in the fourth quarter.