Tech Watch | InfoWorld Staff » Web services market consolidation continues

January 19, 2006 | Comments: (0)

Web services market consolidation continues

TAGS: SOA

Consolidation in the Web services management market clearly has arrived.

Progress Software on Thursday announced its planned $32 million acquisition of Actional, which would become part of Progress's Sonic Software business unit. Sonic has specialized in enterprise service bus (ESB) technology.

"[The acquisition] brings together two really important categories of software, mainly ESB and Web services management technology," said Hub Vandervoort, Sonic CTO.

The deal comes just 10 days after Mercury Interactive announced plans to acquire Systinet, which also has offered Web services management capabilities. In both acquisitions, companies are seeking to leverage the transition to SOA by enterprises.

The deal makes "a ton of sense for Progress," given Progress's ownership of Sonic, said analyst Ronald Schmelzer, of ZapThink, in an email.

"Their ESB product has an ever-increasing footprint and [a] goal to provide as complete as possible infrastructure for running and managing SOA implementations. As such, one of the missing components of their runtime infrastructure was active management as well as more robust security. This is where Actional comes in," Schmelzer said.

"On another note, I think this is a foreboding note for other startups in the industry. It's becoming increasingly difficult to be a small Web Services or SOA-focused startup/pure-play. The larger vendors know that they have to have a comprehensive answer to SOA challenges," Schmelzer said.

"Small companies will either be directly in the competitive path of these large vendors or will be acquisition fodder. Faced with the prospects of competing with much larger vendors, we believe that many will choose acquisition instead of trying to broaden their own capabilities or find deeper pockets. 2006 will bear out to be the year of super-consolidation for the SOA markets," said Schmelzer.

The marriage between Sonic and Actional could have some complications, however. Sonic previously has partnered with another Web services management vendor, AmberPoint.

Sonic has in fact partnered with both AmberPoint and Actional, but it is likely that AmberPoint may begin to distance itself from Sonic, Vandervoort said. But that would be AmberPoint's choice, he said.

Actional already has had partners that also have been competitors, said David Gehringer, Actional vice president of product of marketing. He cited Cisco Systems as one example. "Yet, we've had a very fruitful partnership with them," Gehringer said.

Posted by Paul Krill on January 19, 2006 10:21 AM

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