SeeBeyond says don't fret over Sun acquisition

Middleware vendor SeeBeyond Australia has told customers "not to fret" over Sun Microsystems' offer to acquire the company for $US387 million.

SeeBeyond Australia technical services director RayGear said it was too early to provide details or a timeframe of when the acquisition will go ahead, but did say customers can expect "a stronger company all round".

At the announcement last week, Sun chairman and CEO Scott McNealy said the company is "flush with cash", and had been looking for a suitable acquisition to attack the $US5 billion enterprise application space.

Sun is likely to make other middleware acquisitions. "We're certainly still quite flush with cash to make further purchases; stay tuned as we continue to redefine this strategy," he said.

The purchase is expected to close in September and Sun's chief financial officer Stephen McGowan said there was already a solid working relationship between the two companies.

Locally, Sun was unwilling to comment but Ovum research director Christine Axton said Sun has a history of failing to deliver on previous software acquisitions.

Axton said the merging of Netscape with NetDynamics was fraught with difficulty and the acquisition of Forte also failed.

However, she said this acquisition could be very different as the two companies were working to integrate their solutions prior to the acquisition announcement.

"Although Sun still has money in the bank from its glory years, it's taken some serious knocks in terms of revenue over the last couple of years, particularly in terms of product sales and services," Axton said.

"The moves it is making now will need to have an impact darned quickly, the application platform market is rapidly becoming commoditized and consolidated; it is an intensely competitive market."

IBRS analyst Chris Morris said the acquisition is a good deal for both parties. The acquisition fits with Sun's product plan and provides it with the integration backbone the company really needs.

"I think it's a good deal for both parties. SeeBeyond has had a tough time in the market, so I think this is going to give it ongoing revenue for R&D to play against the big competitors," Morris said.

Current Analysis principal Shawn Willett said Sun has finally made a logical software acquisition adding that it is a great move.

"Sun has had no integration capabilities and this fills an obvious hole. But more importantly, if Sun wants to get into the emerging enterprise service bus, SOA, composite application space, this gives it a good head start," he said.

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