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22 December 2005 IBM this week broke the pre-Christmas calm, unveiling two surprise acquisitions that will broaden its software offerings.

On Tuesday, IBM revealed that it would purchase portal maker, and web services pioneer, Bowstreet, for an undisclosed fee. IBM has partnered with the company has partnered for four years.

Bowstreet's software lets businesses compile applications from separate web services and data sources, using a simple, 'wizard'-style development tool. The addition of Bowstreet's 'Portlet Factory' tool to IBM's WebSphere middleware platform will improve its ability to manage software components in a service-oriented architecture.

On Wednesday, IBM revealed an $865 million deal to acquire another partner, network-management software developer Micromuse.

Micromuse's tools are tailored for the management of multimedia networks that carry data, voice and video. In acquiring the company, IBM hopes to make further inroads into the lucrative telecommunications sector.

Micromuse recently reported a net loss of $3.8 million on revenues of $161 million for the 12 months ending 20 September 2005. CEO Lloyd Carney said that the company had been in 'no man's land' being large enough to develop sophisticated technology, but too small to compete with companies such as IBM.

Micromuse will now become an individual business unit within IBM's Tivoli systems management software division. Competition in the systems management market has driven consolidation, with CA buying Micromuse rival Concord Communications earlier in 2005.

An analyst report for financial ratings firm Standard &Poor's noted that the planned acquisition "follows recent deals that we view as steps to fill holes in IBM's software portfolio, and as defensive moves amid recently increased consolidation in the software industry."