Mercury finally makes a SOA play...but communication is an issue
So Mercury has announced its acquisition of "SOA governance" tools player Systinet for $105 million cash.
I can't say I'm surprised that Systinet has been snapped up by someone: the area where it (and others) play is a cornerstone technology area if service-oriented software propositions are going to really work in the enterprise, and it's been striking that small specialists like Systinet have managed to go through 2005, building nice businesses, without being snapped up.
But I (and I suspect, many many others) would have put money on the company being bought by one of the big platform vendors - IBM, BEA, Oracle, ... particularly as the latter pair both embed Systinet's technology in their service infrastructure offerings. Not Mercury.
The reason is that for a while now Mercury has seemed to be de-emphasising its interest in the software development lifecycle, and focusing more time and money on IT process management issues around portfolio management, service management and high-level IT governance; and application performance management. The software development lifecycle related tools which made the company's name (well, actually the company's previous brand name: Mercury Interactive) are still there, but Mercury has been working hard - to a significant extent, through acquisitions (Kintana, Appilog, Performant, etc) - to move well beyond them.
When you look beyond the PR and marketing at what Mercury actually offers, though, it's clear that managing the quality of the output from SOA initiatives would certainly be something that Mercury would like to do for its customers. And until now a SOA play has been conspicuous by its absence.
What's surprising to me is Mercury's timing, given that just a couple of days before the company disclosed that its failure to restate prior earnings had resulted in its delisting from NASDAQ. It's possible that the company had little choice in this regard, but I would be surprised if there wasn't a little latitude, and Mercury couldn't have delayed the Systinet announcement a little. It could be, of course, that Mercury saw an opportunity to give its shareholders some good news. But in these matters, it pays to tread carefully.
The problem is one of pure PR, and Systinet's arch rival Infravio has wasted no time in making hay. Miko Matsumura (Infravio's VP of Marketing and Technology Standards) told me:
"with Systinet consumed by Mercury, a company recently de-listed from NASDAQ for accounting improprieties, the field is open for Infravio to score some big wins."
This is quote-worthy stuff (and I've just quoted it of course ;-) despite the fact that Mercury wasn't actually delisted for impropriety, it was delisted for its failure to meet a deadline. Mercury needs to get to grips with this ASAP.
I think Mercury's challenge here is part of a broader issue of engaging with the industry and with its markets. It's interesting that the normally well-informed
RedMonk boys think that Mercury is a
testing tools company. The truth is quite different. The Mercury story isn't particularly smooth at the moment, but it is broader than testing.
Finally, I'm not sure if either of the following snippets of information have any bearing on the sniping by Infravio:
- One of Infravio's board members, Ido Sarig, was previously the Mercury VP of Technology Strategy
- Miko Matsumura used to be Systinet's VP of Product Marketing.
Maybe a case of
sour grapes?
