WebMethods sells itself to Software AG

I said a couple of months ago that webMethods needed to shake up a bit. Well, now they've sold out to Software AG - originally best known in the 1980s for its Adabas database and Natural reporting, more recently a player in the XML / SOA world with Tamino and EntireX.

WebMethods was founded in 1996 and its IPO in 200 marked a high point of the EAI boom; an offer price of $35.00 turned into an opening of $195 and a first day close of $212. The price reached over $300 quite quickly, but since then has trended fairly steadily down to today's sub $10. Not a good investment overall!

Software AG wants this to be "a major step in [their] plans to more than double revenue to EUR 1 billion (USD $1.3 billion)." WebMethods' $200 odd million of annual revenue is a big - if barely profitable - step in that direction.

An article at Barrons notes that the share price is now trading above the offer - a sign that some in the market are expecting a higher bid (the analyst doesn't think they will be in luck).

The deal has pushed up Tibco's price too - on hopes that they will be the next target, perhaps.

WebMethods/Infravio X-Registry - free 45 day trial download available

Back in December, I asked would you pay $99000 for a starter pack.

Well, it looks like everyone else must have agreed, and not paid up. So webMethods has now announced a free trial download which "can be deployed for 45 days of testing and evaluation within a non-production environment".

After their recent results (see yesterday's post) I guess someone in marketing has decided it's about time to shake things up and create a few more leads for the salesforce to work on.

EAI results - a mixed bag

Back to looking at financials, a note on Motley Fool that touts Tibco as a "king of cash" reminded me to poke around some of the EAI vendors' financial results.

Tibco's Q4 (ending November 06) was pretty spectacular, with revenue up 20% to $160 million - license revenue growth being a very healthy 32% to $88 million. But earnings over the entire year were barely up; Tibco seems to have a pattern of a huge Q4 after flat Q1/2/3.

WebMethods earnings show license income down more than 10% in Q3 to $19.7 million (total revenues $53.1 million). Motley Fool's article New Product, Same Problem suggests that digesting recent acquisitions (eg Infravio) and restructuring the salesforce are affecting sales.

Vitria's results show a startling spike in license revenue up to $6.7 million up from $1.8 million in the same quarter to Dec 2005 - around half of that accounted for by two customers. Encouragingly, Vitria is in the black.

Finally, BEA takes a bit of a beating - shares down 10% even though revenues were up 15% on same quarter last year. Why? because forecasts are down for next quarter (the analysts wanted $385 million, but management expects only $350-364 million).

A Morningstar analyst rounds it all off in the same news item by suggesting that BEA will get tough competition in the SOA space from Oracle, IBM and Tibco.

Would you pay $99,000 for a starter pack?

WebMethods has launched a starter pack for Infravio X-Registry, which combines a UDDI registry, a JAXR repository, and what they coyly describe as integrated governance [which] ensures that these policies can be effectively applied across design-time, run-time and change-time environments.

For the bargain basement price of just $99,000 you get to minimize the upfront cost of initial adoption. Or to put it another way, you get 2 cpus, 5 named users and a UDDI registry that will allow you to define just 25 web services.

Why on earth would anyone want to pay that much to adopt a vendor-ized version of open standard technologies? Now if they had said this was a free community edition, they might be in with a chance of luring unsuspecting punters in and hitting them with the upgrade later. But this way round? Seems daft to me...

Peter Gyenes joins WebMethods

Interesting move; from 1996 Peter Gyenes ran Vmark which became Ardent, then sold it to Informix in 2000 and a year later helped sell the Informix database business to IBM - leaving him to run the ETL rump which was renamed Ascential.

Last year Ascential itself was sold to IBM (see IBM Purchases Ascential Software".

And now finally he has joined the board at WebMethods. Well, he should be able to teach them a trick or two about M&A. WEBM in play perhaps?