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KnowledgeWare was the largest and fastest growing CASE company in the market, and IBM--which produced its own CASE programs--was determined to latch on to the company and ally its product line with KnowledgeWare's. In August 1989 IBM purchased an 8.7 percent stake in KnowledgeWare for $10.5 million, which helped preserve IBM's position in the market.
With such a powerful vote of confidence, KnowledgeWare became popular on Wall Street. The company seized the opportunity by launching a public offering of 1.7 million shares, representing 15 percent of the company. The sale generated $20 million. Tarkenton personally sold 150,000 shares, netting $1.9 million.
A month after IBM's investment in KnowledgeWare, the latter company's programs were incorporated into IBM's AD/Cycle mainframe CASE product. A few months later, KnowledgeWare introduced its Application Development Workbench, or ADW, program, which garnered the 'analysts choice' award from PC Week magazine. At the time, ADW was the only CASE system that was compatible with IBM's popular new OS/2 system. IBM customers who wanted to use ADW first had to upgrade their systems to OS/2, providing IBM with the increased sales it had hoped for. |