The Blogosphere Reacts to Progress' IONA Acquisition

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June 26, 2008

The Blogosphere Reacts to Progress' IONA Acquisition

Progress Software announced that it is acquiring IONA Technologies in a deal worth about $162 million.

Progress said the IONA acquisition helps round out its product line to provide a "complete SOA backbone" for customers. The company said the deal is expected to close in September, pending regulatory approval in the U.S., IONA shareholder approval, and issuance of an order by the Irish High Court.

IONA's Artix product line offers Web standards based integration technologies for exposing legacy applications to SOA implementations, as well as open source SOA integration components through its FUSE product line. IONA also has endpoint integration with Microsoft's .NET Windows Communications Framework and the open source Spring Java application framework. Progress said these offerings are "fully compatible with the Progress Sonic ESB."

Progress Software has assembled quite a collection of SOA and enterprise computing technologies in recent years, which includes ESB provider Sonic, SOA management/governance vendor Actional, mainframe data integration specialist DataDirect, and mainframe-to-Web vendor NEON Systems (now part of the DataDirect Shadow line).

Some analysts/observers were unmoved by the announcement, however. Dennis Byron, ebizQ's pen source guru, observed: "Effectively this means little to the independent middleware market which had already collapsed in upon itself when BEA was folded into Oracle." He added that "IONA had ceased to be a major factor in the market early this decade, struggling to turn it around from a plateau one-third the size of its 2001 peak of $180 million in revenue." Dennis notes that IONA adds some plum telecommunication and financial services firms to Progress' customer roster, however.

Sanjiva Weerawarana, chairman and CEO of WSO2, also felt that the acquisition was no big deal, as reflected in a blog post entitled: "Yawn. Um. Oh yeah .. Progress bought IONA." Sanjiva called the purchase of IONA, which made about $78 million in 2007, as a "fire sale."

Jason Bloomberg, quoted in PC World, agreed, also adding that IONA likely offers better technology while Progress offers better marketing to the deal. "IONA gets to be part of an organization that has strong sales and marketing, as well as a deep customer base, and Progress gets some of the better technology on the market at what is arguably a fire-sale price."

Some observers fretted that the IONA acquisition would result in competing ESB products. However, the "inestimable and seemingly inexhaustible" Tony Baer (Peter Schoof's apt description) said in a new post that Progress was probably more interested in IONA's Big Iron legacy customer base than its ESB offerings. "This is another step in the winnowing of the ESB market, if there still is such a creature," Tony says. "Last year, which was a good one for the software industry, saw IONA’s revenues go flat and margins sink into the red." Tony feels that the prime attraction for Progress "is the legacy base of Orbix customers whose transaction-heavy loads provide a good complement for its DataDirect business."

The direction of IONA's open source initiatives remains an open question, however. Dennis put it this way: "If IONA was last man standing in the independent middleware market, Progress can be thought of as last man standing in the closed-source culture. One way IONA was trying to get things going again as an independent was through its embrace of the open source culture, development model and terms and conditions."

But it appears, at least from the press release, that IONA will be retaining a degree of independence, so it may have few constraints pursuing its open source strategy. Progress has typically maintained the independent branding of its acquired companies.

Sanjiva says not to worry, Apache will do fine, with or without fully engaged Progress/IONA support. "What will this do the open source projects that Iona used to contribute heavily to in Apache (Apache CXF, Apache ServiceMix, Apache ActiveMQ etc.)? Well, even if Progress decides to defy progress and not go open source (which is my expectation), that's where the beauty of Apache comes in. The maniacal focus on community diversity will mean that even if Progress decides to cut of their own participation in these projects, the projects will live on."

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Posted by joemckendrick in SOA Vendors | Digg This | Add to del.icio.us