Sun's SeeBeyond buy is seen as a sensible deal

Sun is viewed as finally making a sensible deal by acquiring SeeBeyond.

Sun Microsystems has finally made a logical software acquisition with its purchase of SeeBeyond Technology, after years of missed opportunities to buy technology to bolster what has never been a truly successful Java software business, industry observers said Tuesday at the vendor's annual JavaOne show in San Francisco.

Sun unveiled its intent to purchase composite application platform vendor SeeBeyond for US$387 million early Tuesday just before Sun Chairman and Chief Executive Officer (CEO) Scott McNealy delivered his keynote at JavaOne. The deal is expected to close in the fall.

Some noted that Sun might have made the move to acquire an SOA (services-oriented architecture) infrastructure vendor a bit sooner, as Sun has failed to have a solid strategy in this burgeoning space for some time. This has knocked them off the short list of software infrastructure vendors enterprise customers will consider, observers said.

"I think is a great move for Sun that is long overdue," said Shawn Willett, principal with research firm Current Analysis Inc. "Sun has had no integration capabilities and this fills an obvious hole. But more importantly, if Sun wants to get into the emerging ESB [enterprise service bus]/SOA/composite application space, this gives them a good head start."

Stephen O'Grady, senior analyst with Red Monk, echoed that sentiment. "You could certainly argue that [the deal] could've been made sooner," he said. "We've heard a number of times that the lack of an integration server is an issue with [Sun's] current suite of offerings. It makes them competitive in the integration area where they just haven't played before. It's a checklist item that you need to have for RFPs [requests for proposal] and the like."

A longtime Sun consulting partner also was bullish on the SeeBeyond deal, though he, too, admitted Sun might have moved sooner to make such an acquisition.

"I think this deal is fantastic," said Marc Maselli, president and CEO of Back Bay Technologies, an IT consultancy and development firm in Needham, Massachusetts. "Timing could be better -- sooner would have been better from an outsider's point of view -- but regardless, this deal will give Sun the shot in the arm they need to really get on integration, SOA and ESB software purchase short lists."

In his keynote, McNealy said Sun, too, recognized the need to provide SOA software infrastructure to customers, but did not acknowledge that Sun's competitors, such as IBM and BEA Systems, have been providing similar technology ahead of Sun.

"We know there have been a lot of customers who've had a tough challenge integrating all of their applications together," McNealy said, explaining how SeeBeyond's Integrated Composite Application Network SOA architecture fits into Sun's Java software portfolio. "Giving them a way to integrate their applications without having to put [software] together into one stack seemed like a legitimate alternative proposal to put forth to the market."

SeeBeyond founder and CEO Jim Demetriades joined McNealy on stage Tuesday to give his take on why the deal makes sense for both parties. He said that since SeeBeyond's software is built on Java and supports other standard technologies, such as Java Business Integration (JBI), it's a good fit with Sun's Java Enterprise System stack.

Demetriades also said he's looking forward to the reach an established vendor such as Sun can give SeeBeyond, a publicly traded company. "Sun can do something with this that we as a US$200 million company can't do ourselves," he said.

Speaking in a press conference after the keynote, Sun President and Chief Operating Officer Jonathan Schwartz said that once the deal closes, Sun would rely on SeeBeyond's sales force to drive its SOA software strategy. He also said that the deal does not impinge on Sun's plans unveiled Monday to release an open-source implementation of JBI.

"JBI will be the standard, and obviously we're talking about open sourcing an element of the implementation with ESB," Schwartz said. "Secondarily, SeeBeyond will become the full-fledged integration of the tools suite. It's a very simple model. SeeBeyond is the implementation of JBI for Sun going forward."

In addition to stumping for the community and highlighting the SeeBeyond deal, McNealy also promoted industry-specific solutions for Java in his keynote. In particular, he focused on two industries he sees as being in need of a more networked IT architecture: health care and education.

McNealy touted a system the Brazilian National Healthcare organization built with the help of Sun technology, which gives Brazil's citizens Java smart cards they can use to access their health-care information on any network within the system.

This system, which eliminates the need to fill out new forms every time a patient visits a new doctor, particularly impressed one JavaOne attendee. "I can relate to that," said Steve Glisson, design engineer with Global Exchange Services, which provides services based on EDI (Electronic Data Interchange) and uses Java to manipulate data. "Every time we take our children to the doctor, we're asked the same questions over and over and over."

Incidentally, SeeBeyond began as a company that provided EAI (enterprise application integration) technology specifically for the health-care industry, and Demetriades said that "all the top health-care facilities in the world" have standardized on SeeBeyond's software.

SeeBeyond has 2,000 customers worldwide, including Columbia Presbyterian Hospital, Blue Cross Blue Shield of Massachusetts and Pfizer.

Paul Krill of Infoworld contributed to this report.

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