As I said in my previous blog about Sun’s acquisition of tape maven StorageTek, it would have been a little disappointing if that was the only purchase for the company this year. Not because there is anything inherently wrong with the profitable storage company, but because it’s not exactly a high growth market or one that lends itself to integration with anything other than Sun’s storage division. So anyway, the news yesterday that Sun is to buy integration company SeeBeyond is definitely good news for Sun, its customers and shareholders.
SeeBeyond has been around donkeys years, has around 2,000 customers and is actually growing. 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.
SeeBeyond was the first company to make its integration server a fully J2EE-compliant application server, which seems an elegant way of supporting industry standards. The company’s Integrated Composite Application Network (ICAN) version 5 has had good reviews and appears to be seeing good take-up among the company’s existing customers. And over the past 18 months the company has made all the right noises around – and funnelled investment into – service oriented architecture (SOA), which is an important new trend in application middleware, development and deployment.
The buy is not without challenges, however. By Sun’s own admission around two years ago it ‘end-of-lifed’ some of the Netscape/iPlanet integration technology it had bought, so it has certainly had some false starts in the integration space in the past. It also needs to ensure that the SeeBeyond technology remains – and is still perceived – as supporting other platforms beyond Sun’s own, otherwise a chunk of revenue will evaporate from SeeBeyond’s top line.
Sun and SeeBeyond have been close for several years, and its developers will be pretty familiar with each company’s code. Putting SeeBeyond into the Sun software stack, with even closer links between SeeBeyond’s technology and the Java Business Integration (JBI) framework, could just help Sun to recapture some of the ground it has been losing in SOA to the IBMs, BEAs and others of this world.