Sun said the motivation is for it to create what it believes will be the industry’s most complete offering for the development, deployment and management of enterprise applications and Service Oriented Architectures.
SeeBeyond reported sales up 8% at $37.3m in its latest quarter, though it posted a net loss of $2.6m. However, since Sun’s cash offer of $387m represents a multiple of just 1.9 times SeeBeyond’s trailing 12 months sales, if you take SeeBeyond’s cash and equivalents of $73.6m out of the equation, the deal might just prove a bargain.
That said, Sun has had a number of false starts in this space before. Yes, two years ago we ‘end-of-lifed’ the Netscape and iPlanet integration technology, said Mark Bauhaus, VP Java web services at Sun in an interview with ComputerWire yesterday, but they, like most everyone else’s integration technology these days, were proprietary, built in C, and not ready for Java. According to Bauhaus, SeeBeyond is completely different: integration technologies to underpin SOA, but built on open standards and web services.
Sun and SeeBeyond have worked quite closely for several years. SeeBeyond was founded in 1989 by Jim Demetriades as Software Technologies Corp, and changed its name to SeeBeyond in October 2000 because its name had become too synonymous with the by then out-of-vogue concept of enterprise application integration. Since then, SeeBeyond has expanded beyond application integration to offer a suite of tools that offer composite application development, portals, business process management, an enterprise service bus, business activity monitoring, and more.
SeeBeyond’s Integrated Composite Application Network, ICAN 5, launch has helped the company to maintain momentum against fierce competition from Tibco, webMethods, IBM, BEA, and others thanks in part to ICAN’s integration layer, common object model, transformation capabilities, and J2EE-compliant integration server.
Bauhaus said the acquisition is all about synergies, one plus one equaling three, and impetus around growth, leadership and growing and extending an excellent product line. Sun is fleshing out its middleware platform to underpin SOA.
SeeBeyond’s senior vice-president Reed Henry told ComputerWire that the deal also makes sense for SeeBeyond because it has been working with only 60 of its own salespeople but can now sell via Sun’s much larger sales force. He said about 30% of SeeBeyond’s existing 2,000 worldwide customers are also Sun customers, but said the company wants to continue to support platforms other than Solaris even after the deal closes.
Meanwhile, Bauhaus said it has not yet been determined whether or not SeeBeyond’s CEO Jim Demetriades will stay on in some capacity at Sun after the deal is consummated, nor could he say whether the SeeBeyond brand will live on.
In a statement Demetriades said: Since last year, we have actively worked with Sun on joint SOA-based architectural and vertical solutions. The results of these efforts are already being seen through work with joint customers such as Blue Cross Blue Shield of Massachusetts, which is actively leveraging our technologies to drive dynamic cost savings and process improvement.
This transaction will combine the leader in Java and web services with a leader in integration, he added, bringing to market what we believe to be the most comprehensive and productive application development platform suite available today.
Sun’s CEO Scott McNealy said: Today’s announcement reinforces our vision for the future of the Java platform. Sun is well positioned to partner with systems integrators worldwide in serving the global market. Both they and our mutual customers are increasingly focused not only on the world of web services, but the secure integration of those business processes through service oriented architectures. This acquisition strengthens our software portfolio and opens new growth and partnering opportunities worldwide.
He continued: Our recent acquisition activity reinforces our strategy to be a consolidator of innovations in the IT industry and underscores our commitment to heterogeneity. The next wave is about the integration of business systems and today’s acquisition of SeeBeyond signifies an early and forceful move to establish a leadership position in this space. The deal is expected to close in the fall.
