SOA vendor webMethods, Inc. announced Monday that it has entered into a definitive agreement to acquire privately-held Infravio, Inc., a Silicon Valley start up governance vendor. The $38 million cash deal is expected to close by the end of this month.
In a summer of buying sprees by IBM, BEA Systems Inc. and other vendors in the SOA space, this is the second purchase in as many months by webMethods, as the company continues to evolve from its enterprise application integration (EAI) roots towards its goal of being a provider of SOA and BPM software. In August, webMethods purchased Cerebra, Inc., a privately-held start-up which specializes in semantic metadata.
Infravio billed itself as "the SOA governance company" with its registry/repository offering. It had put 150 person-years of research and development into its X-Registry Platform 6, which will now become part of the webMethods Fabric. The integration of X-Registry into the Fabric product will be targeted for December. This is the same timeframe the company gave in August for integrating the Cerebra semantic technology.
"As underscored by today's announcement we believe the SOA market has reached an inflection point," said David Mitchell, webMethods president and CEO, during a conference call this morning announcing the acquisition. "We see organizations seeking to move from proof-of-concept to enterprise-wide adoption. The biggest barrier to SOA today is lack of governance."
In the past year, webMethods has seen the market move from SOA pilot projects to a current level where projects are scaling up to multimillion dollar implementations, which require governance tools for planning, runtime and change management such as Infravio has developed, he explained.
The deal is expected to strengthen webMethods Fabric platform for SOA by adding the governance technology developed by Infravio.
From the Infravio side, Miko Matsumura, vice president of technology standards, said the deal shows the importance of governance in SOA.
"I see this as a way for the solution that Infravio has created to scale up and meet the exploding market demand," he said.
Mitchell said webMethods anticipates that its sales force will be able to significantly increase the revenue from the X-Registry product, which he said was approximately $1 million annually as of this past June.
Ron Schmelzer, senior analyst with ZapThink LLC., agreed that the acquisition is likely to strengthen webMethods product offerings in the SOA space.
"The addition of Infravio promises to add quite a bit of capability and promises to radically change the way that webMethods goes to market with its SOA approach, should they choose to leverage the knowledge, visibility and capabilities of Infravio," he said.
Looking at the two companies' histories, the analyst indicated this deal could added the SOA credibility webMethods has been seeking.
"Infravio has long been a leader in the SOA market, first starting with service interface and then management, and finally resting on a strategy around SOA metadata management, registries, repository, governance and policy management," Schmelzer said. "webMethods got the SOA gospel early in the decade, but they haven't been able to execute on all cylinders yet with regards to the SOA strategy. They had added the capabilities of The Mind Electric with their SOA Fabric early on, but it hadn't really percolated throughout their infrastructure as they made the transition from EAI to SOA."
The analyst said webMethods needs to take advantage not only of the Infravio governance tools, but the company's expertise in SOA.
"Some of the Infravio assets revolve around their deep capabilities in SOA metadata management, governance and policy," he said. "Infravio has really built a substantial product here with some of the most advanced capabilities in the industry. But also, Infravio provides significant thought-leadership and marketing visibility in the market that webMethods has lacked for years. By adding Infravio, if they can keep up the momentum, they have a chance of getting the visibility, capability and strategy around SOA that they need to compete in this hyperactive market."
Infravio has approximately 65 employees, including 50 developers in Chennai, India, according to today's announcement. The 15 U.S. employees are expected to by absorbed into webMethods, filling open positions, Mitchell said. Srinivas Balasubramanian, CEO and co-founder of Infravio, said he will continue to work with WebMethods, but his exact role and title are yet to be determined.
Infravio's X-Registry product had approximately 24 customers, according to Mitchell. The company listed Fortune 1000 customer implementations, including Lockheed Martin Corp., The McGraw-Hill Companies, MCI-Verizon Inc., Providence Health System Inc. and Sprint-Nextel Inc.