Article

Startups swimming against Web services management tide

Jack Loftus, News Writer

Startup Web services management vendors are swimming against the tide in a market where it pays to be a big fish.

A research report from ZapThink LLC of Waltham, Mass., released this week said that even if startups are successful in the growing market, they're likely to become targets of opportunity for big players like Computer Associates International Inc., Hewlett-Packard Company and IBM.

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For the smaller vendors, it is a matter of becoming a big enough fish so that you don't get swallowed. We will continue to see consolidation, and they need build value so they can survive.
Jason Bloomberg
Senior analystZapThink LLC

ZapThink senior analyst Jason Bloomberg offered in the report strategies for startups like Flamenco Networks, Infravio, Blue Titan Software and Westbridge Technology Inc. He also predicts the market will consolidate by next year when the incumbent "big players" fuse the market into three or four major companies.

"It showed in our report that a lot of these vendors are looking for niches where they can offer value to their customers, so they tend to offer a bunch of different things," Bloomberg said.

Vendors like AmberPoint of Oakland, Calif., show promise delivering core Web services management, while Blue Titan Software of San Francisco and Westbridge Technology of Mountain View, Calif., excel in development and security respectively. Metallect and Infravio, meanwhile, are leaders in meta data management, Bloomberg said.

Bloomberg said IBM, HP and CA have a two-year road map to converge on the Web services management market. Bloomberg said these larger vendors have already made acquisitions and are expected to continue to acquire smaller competitors.

"What's going to happen is that the incumbents are going to dominate this race -- IBM, CA and HP; we expect these to be serious players," Bloomberg said. "For the smaller vendors, it is a matter of becoming a big enough fish so that you don't get swallowed. We will continue to see consolidation in the market, and they need build value so they can survive.

"There's basically two kinds of customer states they might be in, one is that if they have Web services they need to remain mission critical; scalable, they need to meet certain service levels. Even if they have just a few Web services, they'll still need Web service management," Bloomberg said.

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