Rational Software pursues model of success

Developers, despite all the common stereotypes, are a conservative bunch. They may like to try new ‘cool’ technologies, but many prefer tried and tested techniques and methods of working. Typically, this means envisioning a problem, developing a solution and then typing in line upon line of code for testing and debugging, before finally delivering the application.

A number of development tools vendors, among them Rational Software, have tried to convince developers that there are other ways of working, with varying degrees of success.

In Rational’s case, the Holy Grail has been to persuade developers that modelling – which creates ‘models’ of business processes or programs and then converts these models into code – is the way forward. Now it hopes a new acquisition


Company name: Rational Software

HQ: Cupertino, California

Main activity: Software development tools

Last full year revenues: $689.8 million

Last full year net income: $58.4 million

Key issue: Rational has a loyal and lucrative customer base but the company needs to convince potential customers to change their programming approach if it is to increase new licence sales.




will make its case much easier to sell.

“For some people, coding is the be all and end all,” admits Iain Gavin, marketing director for Northern Europe at Rational. “But more and more people who have been programming over the years understand the value and benefit [of modelling] as applications rise in complexity.”

Rational claims that writing applications using its modelling language, Unified Modeling Language (UML, now managed by development standards body the Object Management Group), is a more sophisticated and quicker approach than the laborious flowcharting and coding route many developers still take. It claims its tools can create as much as 60% of an application directly from UML models. Moreover, if the application needs to change to adapt to new business processes, developers only need to change the model to update the application.

Rational’s existing customers clearly see the benefit of this approach. The company sells it software on an annual licence basis and, according to Gavin, 95% of customers renew each year. However, Rational still needs to work harder at winning new customers. Revenues for 2002 were down 15% on 2001 at $689.8 million, although the company’s net income was a healthy $58.4 million, higher than most other companies in the sector.

Rational’s customers’ loyalty has also helped the company accrue some $1 billion dollars in cash and equivalent assets, some of which it spent in August 2002 on acquiring Neuvis, a rapid application development tool vendor that also has modelling tools based on UML. Rational hopes to integrate Neuvis’s tools with its own to increase the amount of complete code its modelling tools can produce, even to the extent of creating an entire application without coding.

That, it says, should significantly reduce the costs of application development and, it hopes, spur more companies to adopt the modelling method of development.

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics