IBM Buys Green Hat To Cut Software Development Costs

January 05, 2012: IBM wants to take a big bite out of software development costs with the acquisition of Green Hat, a provider of software quality and testing solutions for the cloud and other environments. The two companies say software defects cost the United States almost $60 billion annually, and testing accounts for more than half of overall development costs and upward of a third of testing teams’ time. When the deal is complete, Green Hat will join IBM’s Rational Software business and will be offered through IBM Global Business Services’ Application Management Services (AMS), which provides strategy, design, implementation, testing and managed services for application virtualization.

There were three reasons driving the acquisition from an industry perspective with respect to quality management and the quality of applications, says Charles Chu, director, product management & strategy, IBM Rational. The first factor is the increasing cost of quality during the last 10 to 15 years, caused in part by the global shift of labor to countries where it costs less. “Labor arbitrage is no longer an option for lower costs.”

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Author: Steve Wexler

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