LiteBytes from Lustratus Research

Why Oracle should buy Tibco next

Only a few months ago, I said that Tibco would not be bought and stated:

"With Tibco, there is no obvious buyer (as Oracle was with BEA) nor is there a neat fit into one of the majors (as BusinessObjects was with SAP).  Of the 4 listed by the "Analysts" quoted above, only IBM would make any sense.  And Oracle, except that it is busy trying to eat BEA."

I now wish to recant and disagree with Steve's view that HP will get the prize.  Now that Oracle has BEA, the next obvious target for it is Tibco and it should move quickly before IBM steps in.  Here are my reasons:

- Tibco has the only big league competition to IBM's WebSphere-MQ in the message oriented middleware space.  It is used widely in the largest financial services companies, telcos and beyond.  With Tibco combined with Oracle's database etc and BEA's application server, Oracle would have the fire-power to take on IBM's hold in these accounts.

- Tibco has developed its BusinessWorks integration product which plays in the SOA/EDA/BPM space.  This is one of the best development tools I have seen in this space as well as being mature.  Combined with Oracle's and BEA's reach, BusinessWorks could deliver in the SOA marketplace in a way that it can't with a standalone Tibco.

- It would only cost $1.4bn (plus a bit of course). :-).

And finally what both Oracle and IBM have shown is that in this market there is no such thing as buying a company too soon - if you don't buy, somebody else will.

Ronan

p.s. I don't have shares in Tibco.   

Will TIBCO be next on the acquisition block?

So, now that BEA has finally fallen to Oracle, who will be next? My money is on TIBCO.

TIBCO Software has done extremely well since it came into existence from its origin as as Teknekron. Initially an EAI (Enterprise Application Integration) company, it quickly expanded to take on challenges such as Workflow, Business Process Management (BPM) and service-oriented architecture (SOA). More recently it added Business Intelligence and Analysis to its portfolio, strenghtened by the acquisition of Spotfire last year. TIBCO products are well-respected, and it has a strong and loyal customer base.

But with BEA going, and webMethods being taken out by Software AG, it is more or less alone as a pure-play middleware player left. In addition, anyone looking at the results for its 2007 fiscal year (ended Nov 30th 2007) will immediately realize that it is an attractive target. The question isn't really whether TIBCO will be bought, but by whom.

Names being kicked about include all the usual suspects - IBM, Oracle, SAP....but I reckon that HP might snatch the prize. It missed out on BEA, but perhaps on reflection TIBCO is a closer match to its needs.

Steve

Why Tibco won't be bought next

Ranadive, CEO of Tibco, has announced that Tibco board would of course consider offers.  And after the recent news about Business Objects and BEA, such offers may seen inevitable.  Jeff Schenider of MomentumSI for instance argues that we have entered a period of inevitable consolidation.  While I certainly think we are already in an era of big-4 and the rest, that does not necessarily mean that every 'small' software company (and remember these are only small in comparison to the giants) must be bought.

The Reuter's piece covering Ranadive's statement comments that "Analysts have said suitors for Tibco could include IBM (NYSE: IBM), Hewlett-Packard (NYSE: HP), Sun Microsystems (NSDQ: JAVA), and EMC (NYSE: EMC)."

I personally wonder.  On the one hand you could ask why not?  Tibco has excellent top tier customers who use its long standing messaging products for core business processing.  It also has some of the best SOA products in its BusinessWorks portfolio - combining enterprise grade reliability with good tooling.  However, I think you need to look a little deeper about the two acquisitions which sparked this consolidation talk: 

BusinessObjects is in what should to be the hot growth area over the coming years - business intelligence - and thus is perfect for the vendors who want to find a new thing to sell to their customer base or a new way to justify their existing product line (by adding a BI layer on top).  Business Objects should have been a target for IBM and Oracle as well as SAP.

BEA was generally believed to be a long term target for Oracle - BEA had after all used the application server wave to capture business from so many of Oracle's enterprise customers.  Oracle first took quite a while to take application servers seriously and then took quite a while to become competitive.  Buying BEA finishes the job off quickly and gets back ownership of all those straying BEA customers.

With Tibco, there is no obvious buyer (as Oracle was with BEA) nor is there a neat fit into one of the majors (as BusinessObjects was with SAP).  Of the 4 listed by the "Analysts" quoted above, only IBM would make any sense.  And Oracle, except that it is busy trying to eat BEA.  Therefore, I don't see Tibco being bought except unless it is Skyped (bought for over the odds to avoid somebody else buying it).

Ronan 

EDA vs SOA

I have been involved in some recent research into event-driven architecture (EDA) and its relationship to service-oriented architecture (SOA), as a result of confusion abounding over the two concepts. Some people seem to think EDA = SOA 2.0. Others that they are already doing EDA in their SOA implementations because they are using asynchronous communications such as a JMS or IBM WebSphereMQ. This confusion is exacerbated by vendors with their own agendas - TIBCO has been banging the EDA drum for ages as the preferred way to go to solve integration problems, IBM has just held a massive event to drive its own SOA agenda, Oracle seem to be trying to straddle the two approaches, and complex event processing (CEP) vendors like Progress have their own stories about EDA.

My own analysis, together with Dr. Ronan Bradley, also of Lustratus, has concluded that as is so often the case, the problem comes down to confusion over terminology. EDA is an architecture, just like SOA. It is a way of running operations, and before anyone starts to ask whether I am on the side of SOA or EDA, the two can happily coexist. But the confusion arises when people start to use EDA as a term to refer to particular implementations rather than to the architecture itself.

In fact, we identified 3 major ways that EDA relates to SOA, and concluded that EDA may have a key role to play as SOA matures - to deal with the increasing management complexity of widescale SOA deployments through a 'management by exception' approach.

For those interested in reading the detailed research, Lustratus has published an Insight on the subject, available at the Lustratus site.

Steve

Tibco well-placed for the future of SOA with Spotfire acquisition

Tibco has announced that it will spend $195m to buy Spotfire, a business intelligence company. This represents a major investment in upgrading its ability to meet a key requirement that arise in large scale mature SOA deployments: The ability to monitor and control the increasing quantity of business relevant information that flows through the network as SOA becomes more pervasive within an enterprise. 

In the pre-SOA world, most business processes are completed within a single application.  Therefore, in order to get a complete picture of the business processes executing it was sufficient to monitor the applications.  In a SOA deployment, this is no longer the case as many business processes are split between applications and much of the information resides in the SOA network and not in applications.  Therefore, to re-establish control from both a business and operations management perspective, it is essential to track the messages and processes flows through the network. 

This acquisition gives Tibco a major boost of its Business Activity Monitoring capability (it already had Business Factor which presumably will now be retired) which is at least half the solution: allowing the business and IT operations managers to display and analyse the information.  The other half is identifying the information to deliver and requires what is called Complex Event Processing: the ability to identify the unusual events or combinations of events that are of interest.

CEP is needed because while there is a potentially huge quantity of information flowing around the network (corresponding to each service invocation and response), from a monitoring and control point of view most of this information is of little interest as it relates to the normal routine operation of business processes.  Therefore, the focus is not simply the bulk shipping of all process and message information to a data warehouse but rather the intelligent identification and management of anomalous behaviours (perhaps an order which is so large that it requires special approval or a problem in inventory which is stopping the completion of order processes). 

Tibco is also well placed to provide CEP, as it announced last week the second version of its CEP product called BusinessEvents – and I expect to see announcements about how they intend to plug together Spotfire and BusinessEvents.

Ronan