IBM is bulking up. Yesterday, it announced plans to purchase Internet Security Systems for $1.3 billion. That brings the technology titan's August shopping tally to more than $3.6 billion, exceeding the $2.02 billion it spent for 16 companies in 2005, $2.1 billion paid for 16 companies in 2004, $2.5 billion used on nine acquisitions in 2003 and approaching the $3.96 billion devoted to purchasing 12 companies in 2002. In 2001, IBM spent $1.1 billion buying two companies.

Here is some analyst reaction to the ISS purchase:

Forrester Research Inc. analyst Paul Stamp:

"If you're an IT vendor without a full security portfolio, it's going to be increasingly hard to compete... EMC is another example of a systems company going out and acquiring security technology." Information storage vendor EMC last month bought RSA Security for $2.1 billion. He points to Symantec's controversial $10.5 billion acquisition of Veritas Software, which closed in July 2005, as an example of the same trend, only involving a security software company moving into the systems management sector.

Allan Krans, an analyst with Technology Business Research Inc.

"Check Point proclaims its intention to remain the last pure-play security vendor, but as consolidation continues and the company finds itself competing with diversified IT vendors like Microsoft, IBM and Cisco, the company may be better suited as a product line within a large company, such as Symantec."

Tags: ibm, software, vc, m&a.