Three Buys And You're InThree Buys And You're In

WebMethods Inc. is on a shopping spree as it prepares to reposition itself as an enterprise application integrator built on Web standards. This week, it revealed three acquisitions that chairman Phillip Merrick says will allow it to start delivering a simpler messaging-based integration "fabric" and business-process monitoring.

WebMethods is acquiring The Mind Electric Inc., which supplies a simplified environment for building Java-based Web services. Merrick says webMethods has appointed The Mind Electric's founder, chairman, and CEO, Graham Glass, as webMethods' new chief technology officer.

WebMethods will base its future integration approach on webMethods Fabric, or software talking to software through a Simple Object Access Protocol messaging infrastructure. WebMethods Fabric will be a rebranding and repackaging of The Mind Electric's GAIA product, which allowed a company to move from isolated and uncoordinated Web services to a managed network of services. WebMethods Fabric will be available by Dec. 31, Merrick says.

Integration suppliers IBM and Tibco Software Inc. have implemented a similar approach; they call their proprietary fabrics, or messaging systems, an enterprise service bus in their integration products, WebSphere MQ and Rendezvous, respectively. Sonic Software Corp., another integration vendor, has been growing rapidly with a messaging fabric based on Java Messaging Service. The messaging systems replace or reduce the need for specialized connectors and adapters between applications, often at $25,000 each.

"Since they are based on standards, [Web] services can talk to other services with much less effort and expense than other methods," writes Tom Rhinelander, analyst with the New Rowley Group, in an upcoming report, "Building A More Flexible IT Infrastructure."

Rhinelander says webMethods, along with Iona Technologies and Vitria Technology Inc., are moving to a messaging fabric that ties applications together and enables the creation of composite applications as new services.

In addition to The Mind Electric, webMethods is also acquiring business-process monitoring software supplier Dante Software Inc.; its third acquisition was Netegrity Inc.'s portal technology, formerly known as Data Channel, and its engineering team. Netegrity is a supplier of an enterprise user-identity-management system.

Merrick says webMethods is rebranding Dante's product line as webMethods Optimize for business-process monitoring, which will be available immediately. The company at the end of the year will introduce webMethods Portal, based on the Data Channel technology.

Merrick says any new application "that can be exposed as a Web service can be integrated" with other elements of the infrastructure, without relying on Java Messaging Service or any single proprietary messaging system. It can deal neutrally with software services, regardless of whether they spring from the Java or Microsoft .Net technology worlds, he says.

Buying technology rather than spending months or years building it remains an attractive option in today's technology market, Merrick says. WebMethods spent about $32 million to acquire the three companies, leveraging the $200 million that it has in cash into a productive resource, he says.

The company has 850 employees and launched its initial public offering Feb. 11, 2000. Its growth rate in 2002 was more than 100%, Merrick says. WebMethods had revenue of $196.8 million for its fiscal year ending March 31, 2003, up slightly over 2002. The consulting firm Deloitte & Touch lists webMethods as the fastest-growing software company in North America, based on revenue over five years.