Web services-based integration software player Cape Clear Inc’s CEO Annrai O’Toole told ComputerWire: I have nothing against Sun, but recently you’ll notice that Jonathan Schwartz [Sun’s president and COO] has been talking more and more about open source and free software. But that really doesn’t sit well with SeeBeyond, they really are like the dinosaurs of the EAI space.
You can’t download their product and test drive it – they don’t want the customer to see it until they have signed on the dotted line, O’Toole continued. That’s because it needs consulting to make it work. You’ll notice that 60% of SeeBeyond’s sales come from services.
In its latest quarter ended March 31, SeeBeyond posted sales of $37.3m, up just over 8%. Of this, about 37%, or $13.7m, came from software licenses. Software license sales grew faster than total sales, and rose 26% year-over-year. However, SeeBeyond is unprofitable and posted a net loss of $2.6m. Sun paid approximately $387m in cash for the company, a multiple of 2.3 times trailing 12-month sales of $167m.
Announcing the acquisition on June 28, Sun said the transaction would see the combination of Sun’s Java Enterprise System and Solaris operating system with SeeBeyond’s products, and by so doing allow Sun 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.
What’s interesting about Sun buying them is that it will be a good test of some of the new principles of ‘let’s all love one another and give away the software’ meeting good old-style enterprise software computing, said Cape Clear’s O’Toole. In that process, it will be another attempt from Sun to transform itself from a hardware vendor into a software vendor.
Meanwhile, another integration rival, Tibco Software Inc, also claimed to be unfazed by the prospect of a combined Sun and SeeBeyond. Speaking to ComputerWire, Tibco CEO and chairman Vivek Ranadive said: For me it is great when Sun buys SeeBeyond, that’s absolutely great. We’ll never hear from them again. It couldn’t have been a better buyout for us. Sun is just not good at software businesses. Look at how they bought a couple of application server companies and never succeeded at it.
Sun’s acquisition of SeeBeyond was a really good scenario for us, Ranadive continued. It’s not like they don’t compete in enough segments. They compete with Intel, Microsoft, Dell, BEA, and now with us. It’s wonderful.
But aren’t some of the standards that Sun holds strong influence over, notably Java Business Integration, key to the maturation of the integration space? Absolutely. You’re right that JBI is key, said Ranadive. But that’s the messaging platform. If you are just doing point to point then it’s pretty pointless. JBI plays into our game, because you need a highly scalable stack of products, and the strength of our company is in having that stack. They don’t have that.
But on the announcement of the deal, Sun’s chairman and CEO Scott McNealy said: [The acquisition] 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.
McNealy 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. Together, we will be able to deliver what other vendors only have in their vision papers, an ideal platform for business and systems integrators to build the next generation applications of the future.
Since last year, we have actively worked with Sun on joint SOA-based architectural and vertical solutions, said Jim Demetriades, SeeBeyond founder and CEO. 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, bringing to market what we believe to be the most comprehensive and productive application development platform suite available today, added Demetriades.
SeeBeyond said its Integrated Composite Application Network Suite brings together back-office integration; B2B integration; extract transform and load; business process management; workflow; business activity monitoring; application adapters; and a suite of graphical development tools for composite application creation based on web services.
With SeeBeyond, Sun said it will extend the Java Enterprise System platform with a sixth suite, the Sun Java System Integration Suite. It said that when combined with Solaris 10, the new suite will make the Java Enterprise System an even more attractive environment for businesses and system integrators to build next-generation customer solutions.
