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Consolidation in SOA

I woke up this morning to six inches of new snow in New Hampshire, a tree down in my driveway, and the news in my inbox that German firm Software AG was acquiring webMethods for somewhere north of half a billion dollars. I don't often comment on mergers, acquisitions, or other corporate financial gymnastics; I don't have a background in business, and often have nothing worthwhile to say. But there are a couple of points of interest here. First, few of us have likely heard of Software AG, or if we have, don't know quite what it does. That's not unusual, for a couple of reasons. First, except for a few international brands (Nokia and Siemens come to mind), we don't necessarily think of European high tech companies as technology leaders.

Second, for those of us who do know Software AG, the reason is probably because of its mainframe products, Adabas and Natural (confession – I was a mainframe coder for a brief period about 20 years ago).

But the company has also been making a push into the SOA market more recently, with products such as Crossvision, a Web services development suite. In that sense, the webMethods acquisition enables Software AG to accelerate its movement into SOA.

I was also wondering if this announcement was presaging a more general consolidation of SOA tools vendors. I don't think the SOA business is going away by any means, but it is certainly possible that we are entering a time when larger vendors in this field are going to start buying up smaller ones to round out product offerings and acquire their customers. This might be the transition to a more mature SOA business. Think of it as the large fish eating the small ones in the food chain.

Posted by Peter Varhol on 04/05/2007

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