Despite the sorry events at Mercury Interactive Corporation (Pink Sheets:MERQ) in recent months, and its relegation to the Pink Sheets, the company’s business continues to progress. Yesterday, the company announced the acquisition of service oriented architecture (SOA) company Systinet Corporation for $105 million in cash.
Market sources estimate Systinet’s revenue in 2005 at $10 million, but it is not yet profitable. The company’s customers include a long and impressive list of large enterprises, including communications equipment giants Alcatel (NYSE:ALA; Paris:CGEP) and Ericsson (Nasdaq:ERICY; SAX:ERIC); operators Deutsche Telekom (NYSE: DT; XETRA: DTEG), France Telecom (NYSE; Paris:FTE), and Orange; leading banks, including Canadian Imperial Bank of Commerce (CIBC) (NYSE:BCM; TSX:CM), and investment JP Morgan Chase and Co. (NYSE:JPM); and other large companies, including Amazon.com Inc. (Nasdaq:AMZN), America Online (AOL), Boeing (NYSE:BA), and Eastman Kodak (NYSE:EK) .
Mercury Interactive presumably bought Systinet in order to add its systems to Mercury’s enterprise business services mapping services, and to expand its offerings for meeting enterprises’ IT demands. In this era of mergers and acquisitions, company must rapidly integrate many systems. They must therefore develop ways of cooperating in business processes and applications with their partners, customers and suppliers.
SOA, the basis of Systinet’s Systinet Registry product, makes it possible to build a layer of new business services on the basis of an enterprise’s existing systems. It is usually possible to upgrade existing systems to support SOA by installing an adaptor that exposes the functionality of web services. In this way, an enterprise’s IT department can quickly implement business needs.
SOA is an information sharing architecture. The IT market has been going in the direction of SOA for two years. All software vendors, such as Microsoft (Nasdaq:MSFT), SAP AG (NYSE, LSE; DAX: SAP), IBM (NYSE:IBM), and Sun Microsystems (Nasdaq:SUNW) are developing products that support SOA. The basis of SOA is web services, which enable systems written in different software languages and running on different operating systems, to communicate with each other, despite their differences, in order for systems to share information. Information sharing is made possible because web services are standardized.
Large enterprises have to decide whether to buy new systems that support SOA, or install web services capability onto their old systems, so that they can interface with new systems. Enterprises that do not want to make large investments in buying new systems want their old systems to be able to communicate with each other, as well as with new systems. They therefore need to wrap their old systems with web services, for which they need SOA.
On its website, Systinet lists SOA’s five important capabilities. The first is “interoperability” - the ability to support existing standards and technology, without the need to replace them. The second is “visibility” - information sharing, eliminating redundancy, and making communication possible. The third is “manageability” - the ability to manage relationships between business services. The fourth is “reusability” of the existing building blocks in an enterprise using web services to improve the return on investment. The fifth is “adaptability” - the use of existing applications to solve new problems and meet new business demands.
The Systinet Registry makes it possible for an enterprise to support these five capabilities and manage the business aspects of its web services.
Published by Globes [online], Israel business news - www.globes.co.il - on January 10, 2006