Todd Biske: Outside the Box

SoftwareAG is acquiring webMethods. Interestingly, Dana Garnder’s analysis of the deal seems to imply that webMethods earlier acquisition of Infravio may have made them more attractive, but given that SoftwareAG had a solution already, CentraSite, I wouldn’t think that was the case. It is true, however, that CentraSite hasn’t received a lot of media attention. I wonder what this now means for Infravio. Clearly, SoftwareAG has two solutions in one problem space, so some consolidation is likely to occur.

Dana’s analysis points out that “bigger is better in terms of SOA solutions provider survival.” This is an interesting observation, although only time will tell. The larger best-of-breed players are expanding their offerings, but will they be viewed as platform players by consumers? It’s very interesting to look at the space at this point. At the top, you’ve got companies like IBM and Oracle who clearly are full platform vendors. It’s in the middle where things get really messy. You have everything from companies with large enough customer bases to be viewed in a strategic light to clear niche players. This includes such names BEA, HP, Sun, Tibco, Progress (which includes Sonic, Actional, Apama, and a few others), SOA Software, Iona, CapeClear, AmberPoint, Skyway Software, iWay Software, Appistry, Cassatt, Lombardi, Intalio, Vitria, Savvion, and too many more to name. Clearly, there’s plenty of other fish out there, and consolidation will continue.

What we’re seeing is that you can’t simply buy SOA. There also isn’t one single piece of infrastructure required for SOA. Full SOA adoption will require looking at nearly every aspect of your infrastructure. As a result, companies that are trying to build a marketing strategy around SOA are going to have a hard time now that the average customer is becoming more educated. That means one of two things: increase your offerings or narrow your marketing message. If you narrow the message, you run the risk of becoming insignificant, struggling to gain mindshare with the rest of the niche players. Thus, we enter the stage of eat or be eaten for all of those companies that don’t have a cash cow to keep them happy in their niche. As we’ve seen however, even the companies that do have significant recurring revenue can’t sit still. That’s life as a technology vendor, I guess.

Update: Beth Gold-Bernstein posted a very nice entry discussing this acquisition including a discussion of the areas of overlap, including the Infravio/CentraSite item. It also helped me to know where SoftwareAG now fits into this whole picture, since I honestly didn’t know all that much about them since the bulk of their business is in Europe.