Baby Breaker Birth Announcements

Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds corporate cash flowing in Rule-Breaking ways.

First up this week is IBM (NYSE: IBM  ) , which has struck an interesting deal with venture capitalist Walden International. I say "interesting" because Walden has effectively agreed to fund start-ups that could produce a modest royalty stream for Big Blue, and no small amount of services business.

Walden will invest $100 million in Asian start-ups building products around IBM's blade server technology, reports VentureWire. A blade server looks like the guts of a computer -- and in a way, it is. Blade servers comprise little more than a motherboard with a lot of chips, memory, storage capacity, etc. -- just enough to operate as a fully functioning computer. The catch is that these "blades" aren't enclosed. Instead, they're designed to plug into a big, multislotted box. Keeping them open in this fashion allows blade servers to run cooler than their enclosed counterparts, which tends to make IT managers very, very happy. (Read this to understand why.)

Anyway, this matters because blade servers are catching on. As they do, IT managers will likely seek help with designing and administering data centers -- vast rooms filled with server computers that run complex corporate software. IBM would prefer to get the first service call. That's more likely when most of the infrastructure is designed, or inspired, by Big Blue. A Rule-Breaking way to increase potential market share, don't you think?

Next up is scandal-plagued Computer Associates, which has tried just about everything to boost its image, including changing its official corporate name to CA (NYSE: CA  ) . Now you can add acquisitions to the list. This week, the struggling software maker acquired MDY, which specializes in electronic record-keeping, for $25 million, according to VentureWire. That follows a $375 million purchase of software-performance monitor Wily Technology in January.

CA's strategy, it seems, is to get past regulatory and other troubles by proving that it is capable of moving its business forward. If that sounds a little like a smokescreen, that's probably because it is. But there's also inherent logic to the approach, and I'm not just talking about how it remakes CA's troubled image. Consolidation in enterprise software has become popular. Witness Oracle (Nasdaq: ORCL  ) and its continuing string of acquisitions.

So expect CA to remain hungry, and expect competitors to be equally ravenous. For large tech firms in maturing industries, the old process of developing software organically and then releasing it to the world may no longer apply.

And that's all for this week. I'm off next Friday for a little family time, so I'll see you back here in two weeks to continue the quest to find the next ultimate growth stock.

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Fool contributorTim Beyersowns shares of Oracle. You can find out what else is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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