In a release titled The End of Middleware as You Know It!, Iona said: Oracle’s bid for BEA is a clear indicator of inevitable consolidation in the middleware market. As consolidation continues, big propriety stacks will get bigger and more expensive, and the speed of innovation will decline. Who pays for this consolidation – the customer.
The game for the biggest players is simple, Iona said. Buy expensive, complex stacks to solve integration problems. Oracle’s acquisition of BEA will only make the stack bigger, more expensive and more complex – the exact opposite of the intent of SOA.
Iona also drew a bleak picture for BEA customers if Oracle gets its way and does become the proud new owner of BEA. BEA customers have to question what the future holds, said Iona. Oracle has a long and proven track record in acquisitions that disrupt the install base of the acquired company. The timeline is usually as follows: acquire company A by force, inherit company A’s positive revenue streams, retire company A’s redundant technology, put company A’s existing customers on a costly maintenance and upgrade plan. Any way it shakes out, BEA’s customers will pay.
Iona said it offers an alternative to the SOA stack, which it said, can eliminate the stack all together and work within your given infrastructure. Why deal with the uncertainty of hostile acquisitions when Iona has a world-class solution that gives customers the option to deploy open-source technologies, closed-source technologies, or a combination of both?
Our View
Founded in 1991, Iona is one of the longer-lasting middleware vendors with a rich history particularly in the older Common Object Request Broker Architecture space. It has not had a particularly easy time transitioning from Corba to more modern services oriented architecture tools. But in more recent times things have been moving in the right direction: its third quarter saw total sales up 19%, and it claimed sales of its Artix enterprise service bus was up 82%.
But with total sales for the quarter of $24.2m, Iona is clearly in a different league to the Oracles, IBMs, Suns, and BEAs of this world. So while it is true that a lighter-weight approach to SOA challenges than the SOA stacks espoused by those companies may well be a better approach for some customers, it’s also clear that Iona has lacked the scale to invest in a stack of its own, even if it had wanted to.
The debate between suites (or stacks) and best-of-breed tools is not new, nor is it particularly enlightening. What is right for one project or customer may be an expensive mistake for another, and the question usually comes down to, what are you trying to do? One thing is clear though: the SOA stack vendors that Iona is dismissive of have made far more revenue than Iona so far, suggesting that a large number of customers believe that a SOA stack is the right approach for them.
As for Iona’s argument that Oracle will disrupt the installed base of the acquired company, this has not been clearly proven in the case of Oracle’s recent acquisitions. Indeed, some analysts say they have been surprised how long Oracle has committed to support its acquired customer base on their original technology platforms. This honeymoon period may not last as long as some customers would like, and there are others who would rather not have become Oracle customers in the first place through no choosing of their own. For other customers, being served by a far larger organization, with larger services teams, a broader product portfolio and deeper R&D pockets, is fine by them.
This kind of FUD from Iona is understandable, and it does at least help to get smaller vendors a little publicity in the face of the huge marketing budgets of the software giants. But we can’t help thinking that if Iona envisages inevitable consolidation in the middleware market, it surely can’t see itself as a consolidator, but a potential target. If it does become part of a larger organization, all of this rejection of the idea of a SOA stack may well come back to haunt it.
