IBM plans to shell out $740m to acquire asset management specialist MRO Software in a move designed to plug gaps in the Tivoli IT service management (ITSM) suite and extend its functionality to provide physical as well IT asset management capabilities.

Norman Wilkinson, service management leader for IBM Tivoli in the UK, Ireland and South Africa, said that alongside an asset management toolset MRO would also provide IBM with a service desk suite. "We've seen some criticism from analysts over [IBM not having major service desk capabilities] and this deal really fills that gap," he added.

The deal will cause few integration problems once it closes in the fourth quarter, as the companies have worked as partners and integration between MRO's service desk and Tivoli's change and configuration management database is well advanced, said Wilkinson.

However, analysts warned that while the deal will fulfill Tivoli's long-standing need for service desk functionality MRO's asset management capabilities could potentially take IBM into conflict with application partners such as SAP and arguably violate its pledge to focus on IT infrastructure rather than business applications.

Mary Johnston Turner of analyst Ovum said the deal could mark a major extension of the Tivoli portfolio. "What IBM appears to be saying is that all assets, be they IT, supply-chain assets or office furniture, will have electronic tags and will need to be managed from a unified asset management system," she said. "It is a long-term play and will require a lot of evangelising but it could massively extend Tivoli's reach… The issue is: can it convince partners that asset management is part of the infrastructure and not an application?"

A research note from AMR Research agreed IBM was in danger of alienating partners, and said "the fact remains that MRO Software is first and foremost an EAM [enterprise asset management] application software vendor that actively competes with SAP and Oracle".

It added that until IBM explains its plans for MRO the move "threatens to destabilise the demilitarised zone between IBM and the large enterprise software application providers".

The move is also likely to fuel speculation that IBM may eventually ditch its agnostic stance towards applications and acquire a major business applications vendor. Last year, Ray Lane, former Oracle president and partner at venture capitalist firm Kleiner Perkins Caufield & Byers, reportedly argued that IBM should buy SAP to strengthen middleware and services offerings.

Separately, Wilkinson claimed that following its recent acquisition of Micromuse IBM was on track to deliver a fully integrated business service management (BSM) suite around the end of the year. He said the new suite would feature functionality from both Tivoli and Micromuse's BSM toolsets as well as a "souped up" user interface and improved service-level agreement (SLA) management tools.