While webMethods said it could not say too much until the deal closes – likely to happen in June – a spokesperson said the company took particular umbrage at the comments from Tibco CEO in a recent Computer Business Review article that webMethods technology is largely obsolete, and Vitria’s comments also in Computer Business Review that the webMethods technology has declined.
The spokesperson pointed to a recent analyst report, the Forrester Wave: Integration-centric Business Process Management Suites, Q406, that put webMethods at the very top right-hand corner of is chart, meaning both its current offering and strategy are considered strong. Indeed Forrester put webMethods narrowly ahead of Tibco on its chart based on strength of current offering, and ahead of Vitria on both current offering and strategy.
Forrester wrote in its executive summary in the same report: webMethods has worked diligently to gain and maintain a leadership role in the integration software category. The vendor accomplished this using a product strategy that relies on a heavy dose of internal development and quick integration of acquired technology.
Certainly Software AG is convinced of the value of webMethods’ technology, paying $546m cash, roughly a 25% premium over webMethods pre-announcement share price.
Software AG’s CEO Karl-Heinz Streibich said on the announcement of the deal: webMethods’ Fabric product family combined with Software AG’s Crossvision SOA suite will provide an end-to-end SOA solution that allows our combined client base to more effectively create, manage and govern their business processes. Together we will be creating truly advanced SOA solutions.
Our View
As we noted when reporting Tibco and Vitria’s original criticism of webMethods’ technology, neither vendor could describe themselves as independent observers.
We pointed out though that in its latest quarter ended December 31 webMethods posted sales growth of just 1%, was loss-making, and new license sales fell slightly. In its latest quarter ended March 4 2007, Tibco saw sales rise almost 10% to $125.7m, while Vitria saw growth of 41% but to a far smaller number, $16m.
We would also note that although Forrester distinguishes between integration-intensive, people-intensive, decision-intensive, and document-intensive BPM, other analysts have different taxonomies and different vendors come out better in different analysts’ reports. This is at least in part due to the fact that there is no single definition of a BPM suite, making it difficult to compare like with like.
We also note that although Forrester said webMethods has, the most comprehensive IC-BPMS in the market, it also said that Tibco has, the most advanced BPM features overall, covering both integration-centric and human-centric features.
According to Gartner numbers, meanwhile, the SOA and BPM businesses of a combined webMethods and Software AG will total $156m, placing the new firm just behind IBM and Tibco.
We would agree with Tibco and Vitria that some of webMethods’ older technology, dating back to its B2B and EAI roots, has been in decline for some time. But most companies have some older products in their portfolios that provide useful maintenance streams and the chance to upgrade customers to more recent technologies. Today, we believe most of webMethods’ technology is up-to-date. The execution of its strategy though is quite another thing, and if Tibco and Vitria had criticized only its recent financial performance, then we would have had little reason to add anything further.
