webMethods Gets Active (Software That Is)
On Monday May 22, webMethods Inc. (NASDAQ: WEBM) announced that it will
purchase Active Software, Inc. (NASDAQ: ASWX) in an all-stock deal. The
purchase is worth approximately $1.3 Billion. WebMethods is a vendor of
B2B eCommerce integration software, and the acquisition of Active allows
them to extend their integration strategy for extended supply chain and
an 8-K statement filed with the Securities and Exchange Commission, webMethods
stated that a wholly- owned subsidiary of webMethods, known as Wolf Acquisition,
would merge Active into webMethods with each issued and outstanding share
of Active's common stock, at a par value of $.001 per share, to be converted
into $.527 non-assessable shares of webMethods common stock. The transaction
will be accounted for as a pooling-of-interests.
president, CEO, and chairman of webMethods, Phillip Merrick, will stay
in his current position. R. James Green, Active's CEO, will become the
technology chief and executive vice president of the combined firm, as
well as becoming a member of the board of directors. The companies expect
the deal to close during the third quarter of 2000.
Software is a front-runner in the application integration market with
industry-leading technology, an experienced management team and a large,
blue chip customer base", said Phillip Merrick, webMethods CEO. "By combining
our product offerings, webMethods and Active Software are redefining the
integration software market by delivering the first end-to-end solution
that operates inside, outside, and across the corporate firewall."
Active recently entered into a marketing agreement with Acta (for more
information see, "Acta
Gets Active", May 25, 2000), and it will be interesting to see how
this development affects the relationship. Other recent mergers in this
same market space include Vignette's acquisition of OnDisplay, which had
recently purchased Oberon Software, Alier's acquisition by Active, and
Auxilium's acquisition by Parametric Technology (PTC). The Enterprise
Application Integration vendor market is rapidly shrinking, and will probably
continue to do so.
of the results of the acquisition will be to allow webMethods to expand
their international presence, since Active has offices in the United Kingdom,
France, Germany, and the Netherlands. Since EAI is most important to large,
multi-national corporations, this should help to increase their market
presence. Some of webMethods existing customers include Dell Computer,
Lucent, and Bell Atlantic. Active claims approximately 200 customers in
verticals such as telecommunications, government, manufacturing, and transportation.
Customers evaluating Enterprise Application Integration solutions should
be cautious at this point. The market is beginning to coalesce and will
contain fewer vendors within the next year (reduced to 10 major vendors
within 12 months, 70% probability). Major vendors such as Vitria Technology,
Tibco, Mercator, and New Era of Networks (NEON, not to be confused with
Neon Systems), will continue to survive, but many of the lesser players
in EAI will fall by the wayside.
considering the webMethods/Active solution, care should be taken to make
sure that the development, support, and marketing staffs have been properly
merged, and that the products' code bases have been combined, otherwise
this is not much more than a marketing alliance from a product perspective.