In a bid to cash in on the booming Java application development market, BEA Systems Inc yesterday signed a definitive agreement to acquire the VisualCafe product line and business unit from Symantec Corp.
BEA said it will use the purchase, for $75m in cash, as the basis of a new independent company, jointly set up and funded by BEA and Warburg Pincus Ventures, the investment firm that initially backed BEA.
Speaking on a conference call Monday, Joe Menard, president of BEA’s e-commerce server division, said the new company was set up to take advantage of the exploding Java development tool market. He said the aim was to develop and acquire technologies that would enable companies to build Java-based e-commerce applications.
The mission is to help businesses quickly develop and quickly deploy component-based applications, Menard said. If e-commerce is to take off as rapidly as expected, companies need the necessary tools and the programming model of e-commerce is Java.
Plugging its Java development tools hole is an important strategic move for BEA. BEA and Symantec have already enjoyed a close partnership – Symantec ships a developer’s copy of BEA’s weblogic server with VisualCafe – but having a Java IDE of its own will enable BEA to better compete with rivals IBM, Oracle and the Sun/Netscape alliance, all of whom have their own IDE products.
The move also makes sense for Symantec, whose stated ambition is to rid itself of all non-core technology to focus on its key internet security products. The company announced its intention to spin off the VisualCafe division in June, so selling the technology to BEA is a logical fit.
Menard said BEA decided to form a new company rather than fold VisualCafe into BEA because it wanted to create an open development environment that would support multiple platforms, not just BEA’s.
We want to create a cottage industry around Java tools, he said. The market must be open and that includes BEA’s Weblogic server, IBM’s Websphere and evolving products from the Sun/Netscape alliance.
Last month, BEA paid $100m in stock for e-commerce component vendor The Theory Center. Menard said the VisualCafe tools would be able to work with those tools, now called BEA CommerceReady, as well as other components.
The as-yet unnamed company is expected to begin operations in January 2000. Menard said all Symantec’s 50-strong VisualCafe team would become the firm’s first employees and that they were currently seeking a CEO. He said the company would seek further investment from other specific system and industry players, some of whom are being approached already.
