WebMethods: Shifting Gears

Customers have been watchingWebMethods closely in recent months.In addition to WebMethods beingacquired in June by Germany’s SoftwareAG for $546 million, the company, earlierthis year, introduced the latest generationof its flagship integration suite,WebMethods Fabric 7.0.

So far, customers likewhat they see. They lookfavorably on Fabric 7.0’sprocess automation features,which some users had considereda gap in WebMethods’ product portfolio.And they view the Software AG acquisitionas a positive move—or at least aneutral one —saying the buyout booststhe company’s product road map andlong-term viability by acquiring mass anda broader customer base.

With the acquisition,WebMethods’ center ofgravity shifts from integrationto SOA governance, notesSusan Ganeshan, vice presidentof product managementat WebMethods. Governancesoftware offers a registry forhousing services and monitorsthe performance of servicesthroughout their life cycle.

WebMethods’ Fabric 7.0already reflects that change infocus. The product includesa message broker for routingdata requests among services,but it also contains governancecomponents obtained throughWebMethods’ 2006 acquisitionof Infravio. Software AGalso offers governance softwarewithin its Crossvision productline, which will be placed underthe WebMethods label.

Scott Prescott, senior information-technology analystwith Progress Energy, says theInfravio acquisition positionedWebMethods among the marketleaders in SOA offerings. He notes that the subsequent Software AGdeal keeps WebMethods “heading in thedirection that we favor.”

Progress Energy used WebMethodsfor enterprise application integrationsolutions and is now laying thegroundwork for an SOA.

In the past, FairfaxCounty (Va.) PublicSchools found it had towrite custom code to workaround WebMethods’process shortcomings. In one project, thedistrict wanted to add an inbox featureto let users see tasks waiting to be processed.WebMethods provided an inboxfeature, but the district’s technology shopdetermined that it couldn’t be used “outof the box,” says Ted Davis, director ofenterprise information services. Davissays the inbox provided information,such as the date and time of the transactionwhen presented in the queue. But,he says, “We wanted to present informationfrom within the transaction, such asstudent name and ID.” As a result, Fairfaxwrote its own inbox.

WebMethods spokesman John Conleysays Fabric 7.0, through its Designer component,offers pre-built support for inboxfunctions like sorting and searching inboxitems, and delegating and escalating tasks.WebMethods supported those functionsin the past, but they weren’t pre-built intothe product, he says. “They weren’t asintuitive as they are today,” Conley adds.Davis says the process and advancedworkflow limitations appear to havebeen dealt with in Fabric 7.0,adding that the district plans toupgrade to it next year.

As for Software AG, the dealbrings the company closer to itsgoal of becoming a $1.3 billionorganization by 2011. The combinedcompany has revenue ofaround $850 million.

Davis, of Fairfax CountyPublic Schools, has been anticipatingthe company’s acquisitionfor some time. “We’ve beenholding our breath and waitingto see who was going to buythem,” Davis says. “Right now,I don’t see [the acquisition]having a big impact on us orour direction.”

Toby Redshaw, corporatevice president for Motorola, saysthe acquisition brings greatersecurity to WebMethods customers.WebMethods productsprovide the middleware layer forMotorola’s SOA.

He says WebMethods was asizable firm by software companystandards, but “wasn’t so big thatyou thought they were going tobe there forever.”

At A Glance

WebMethods
3877 Fairfax Ridge Road., South Tower
Fairfax, VA 22030
(703) 460-2599
www.webmethods.com

TICKER: SOWG.DE (Frankfurt)

EMPLOYEES: 1,600

David Mitchell President & CEO

Marc Breissinger CTO

PRODUCTS: Fabric 7.0, the latest release of the flagship product, includes a message broker and governance capabilities.

CUSTOMERS: 7-Elven, American Electric Power, Corporate Express, Motorola, TD Banknorth, U.S. Department of Defense

FINANCIALS

2007FYTD*2006FY2005FY
Revenue$149.88M$208.82M$200.60M
Net Income($15.54M)$149.96M$140.00M
R&D Spending$34.44M$40.18M$44.52M

*For first nine months ended December 31, 2006. Fiscal year ends March 31. Software AG acquired the company in June 207.

Source: Company Reports