BEA Buys SOA Startup

Vendor hopes the $87 million it paid for Fuego can fire up the SOA market

March 2, 2006

3 Min Read
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BEA Systems today ponied up $87.5 million for privately held software specialist Fuego in an attempt to bolster its Service Oriented Architecture (SOA) story and grab a solid base of big-name users.

SOA treats applications software as a collection of autonomous, reusable business services that enables users to run these applications across different platforms, including the Web.

A number of vendors -- including IBM, Sun Microsystems, and HP -- have been making a lot of noise in the SOA space for some time, although users are only now gingerly deploying the technology. (See Oracle Sets Sights on SOAs, SeeBeyond Sucked Into Sun, IBM Intros SOA , and Helps DreamWorks With SOA.)

Fuegos flagship offering is FuegoBPM, a software for managing the different business processes within an SOA. But, more importantly, BEA, which announced plans to turn its own AquaLogic software into a serious SOA contender last year, is also getting its paws on a ready-made SOA user base.

Since its foundation in 1999, Fuego has amassed a 170-strong customer list, which includes marquee accounts such as JPMorganChase, British Petroleum, Citigroup, and Southwest Airlines.Nonetheless, with firms still only tentatively deploying SOAs, BEA is betting that it can tie Fuego’s customers closer to its own AquaLogic platform and push additional software their way. (See Merrill Lynch and Users Cite SOA Savings.)

Speaking on a conference call this morning, BEA execs confirmed that the Fuego portfolio will now be marketed as the somewhat long-winded AquaLogic Business Service Interaction product line.

But Maciej Zawadzki, president of consulting firm Urbancode, and organizer of the BEA User Group in Cleveland, Ohio, warned users not to be blinded by all the activity in the SOA space. “The market momentum is ahead of the technology need for it,” he said.

Firms looking to pull their existing internal systems together may not need to deploy complex SOA infrastructures if they use existing protocols, according to the exec. “By using J2EE, for example, you could get different servers talking to each other without having to build an SOA,” he explained.

But Zawadzki says that SOAs are a good fit for environments where firms, for example, need to tie J2EE and Microsoft systems together, and in situations where users needs to share information with the outside world. “If your goal is to expose your services to your partners and you are crossing company boundaries then it is the way to go.”This is not the first time a user has voiced a degree of skepticism about the growing barrage of publicity surrounding SOA. Other execs have expressed their concern about lack of standards and best practice models, not to mention vendor hyperbole. (See Wall Street Eyes SOAs, Users Send SOA SOS, SOAs: Approach With Caution, and Burton Group Over Stumbling Blocks.)

On this morning’s call, Mark Carges, BEA’s executive vice president, explained that ninety-nine percent of Fuego’s 100-plus employees will be shifting over to the software giant following the acquisition. “All the go-to-market pieces will be coming over, and the engineering team will be coming over as well,” he said. Carges also hinted that Fuego’s workforce would continue to be based in its current Plano, Texas, HQ.

Jon Lauck, Fuego’s CEO, confirmed that he will be moving over to BEA, and expressed his frustration at his firm’s previous startup status. “I wanted to do a thousand of those [major end-user] deals, but we were constrained by our size,” he explained. “We have had a lot of demand in Asia for our product, but because of our size, we couldn’t deal with that.”

Today’s deal represents BEA’s latest foray into the SOA market, and follows the firm’s acquisition of Fuego’s OEM partner Plumtree last year. (See BEA Picks $200M Plum and BEA Looks to VOIP, SOA.)

The market, however, was not exactly overwhelmed by BEA’s SOA spiel. In trading today, the software vendor’s shares fell 16 cents (1.39 percent) to $11.31.— James Rogers, Senior Editor, Byte and Switch

Organizations mentioned in this article:

  • BEA Systems Inc. (Nasdaq: BEAS)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • IBM Corp. (NYSE: IBM)

  • Merrill Lynch & Co. Inc.

  • Microsoft Corp. (Nasdaq: MSFT)

  • Plumtree Software Inc.

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