I must be clairvoyant. It was only last week that I wrote how, “[Iona’s] board is apparently currently evaluating what it described in its 10Q as ‘strategic alternatives’ for the firm, no doubt thanks to ongoing concerns that its more modern technologies (Artix, FUSE etc) are not doing quite enough to make up for the gradual decline in its mature Orbix business (down 5% year over year in its latest quarter, to be precise).”
And so it came to pass: Iona has been acquired by Progress Software… [click continue reading for more on this story]…
Progress is buying the Dublin, Ireland-based firm for $106m net of cash. It’s a 16% premium over the average price for IONA shares over the six months prior to the offer period, but it’s a paltry sum compared to the value put on Iona back in its heyday, when it enjoyed one of the most successful IPOs in the US of any software firm.
Still, that was when CORBA was hotter than a car bonnet on a very hot day, and Iona was the market leader in the space. Sadly it couldn’t quite keep up with developments in the integration space, and neither its Artix enterprise service bus (ESB) nor open source CXF and FUSE projects command either the mind- or market-share that its Orbix CORBA product once did.
It had limped on gallantly and actually seen some growth – in its latest quarter it grew sales 6% to $16.4m — but it also posted a net loss of $5.1m, including a restructuring charge of $1.5m.
A public company making less than $100m a year and growing at less than 10% is simply not a viable proposition any more – compliance with Sarbanes and all the other regulatory demands costs anywhere from $1m to $5m a year, and if your profitability is already wavering it’s time to look for a buyer to take you private or make you part of their larger portfolio.
Progress said the acquisition will create, “the industry choice for truly independent, heterogeneous Service Oriented Architecture (SOA) infrastructure.”
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It said the Iona products complement the Progress SOA portfolio: “With the addition of Iona technology, legacy and high performance applications written in C++ or those built to the CORBA standard, can now expose reusable services that fully participate in a Web-standards SOA implementation. In addition, Iona also has “smart endpoint” integration with Microsoft’s .Net Windows Communications Framework and the popular open source Spring Java application framework.”
“These smart endpoints, service-enabling almost all existing applications, can work within any IT environment through a wide-variety of network protocols and are fully compatible with the Progress Sonic ESB to form a complete SOA “backbone” for heterogeneous integration and interoperability,” said Progress.
Iona CEO Peter Zotto seemed to have misread the signals somewhat when he said that, “We could not have chosen a better partner,” – there’s a bit of a difference between an acquisition and a partnership agreement – but he added that, “Progress is now the clear choice for SOA implementations in performance-demanding IT environments. Combining Iona’s proven expertise in distributed system integration technologies with the Progress SOA portfolio will allow customers to achieve a better return on existing IT assets and future IT investments.”
Iona chief Peter Zotto: likened being bought to a ‘partnership’.
As for the open source elements in Iona’s portfolio, Progress said that Iona’s Open Source Strategy and FUSE product line dovetail with Progress’ SOA/ESB strategy by broadening the reach of Progress sponsored technologies and seeding the market for value added capabilities such as SOA management, Complex Event Processing (CEP) and data interoperability services.
Progress said it will be continuing the FUSE business. The FUSE product line will continue to evolve and Progress will continue to offer support, consulting and training services for the FUSE open source product line. “More importantly FUSE customers will benefit from Progress’ global reach and organizational expertise in messaging, ESB, and SOA expertise,” said Progress.
Finally Progress confirmed that once Iona is fully integrated into Progress, it will drop the Iona brand once and for all, though some Iona product names may live on. After 17 years, the plucky Irish firm has finally lost its independence. It fought a good fight, still has some excellent technologies in its portfolio, and its various thought leaders have given this journalist plenty to write about over the years.
So too has Progress Software, so rest assured there is likely to be plenty more to write about the Iona products and how they fit into the Progress strategy in the months and perhaps even years to come.
