RealTime IT News

Sun to Buy SeeBeyond For $387M

Sun Microsystems has agreed to buy SeeBeyond Technology for $387 million in cash to shore up its service oriented architecture (SOA) plans. The deal is a 29.6 percent premium over Monday's closing price for SeeBeyond's stock.

SeeBeyond, whose 2,000 customers include HP, Halliburton and General Motors, makes a Java-based software suite that helps companies integrate disparate applications.

Called a composite application suite, the software system helps organizations write and run applications built from existing systems and infrastructure. Rivals Tibco and webMethods make similar integration products.

Reusable assets like code or services are hallmarks of the SOA, a distributed computing model many major software vendors are edging toward to meet customer demands for more flexible computing.

Sun President and CEO Scott McNealy said on a conference call that SeeBeyond Integration Composite Application Network (ICAN) suite is the final piece to complete Sun's Java Enterprise System, held together by the Solaris operating system.

Sun will take ICAN 5.0's integration and data management tools and make them a sixth suite in the JES, called the Sun Java System Integration Suite, he said.

"We used to have to have two different environments, one for traditional 'build your applications' and one for integration," McNealy said. "Now we've combined those two different skills and tools sets into a common converged environment. We looked around hard and we didn't see anything that has the capabilities that ICAN 5.0 has."

"One other big winner here will be all of our joint integration partners, who will be very excited about taking this product to market," McNealy said. The executive cited Accenture, CSC, Deloitte, EDS, CAP Gemini as systems integrators who expressed interest in Sun's move.

Unable to resist a dig at integration software leader IBM, McNealy added: "All of the major systems integrators are excited about this and would certainly much rather leave with Java Enterprise System, Solaris and SeeBeyond than, say, WebSphere."

Analysts place the application integration suite space somewhere in the $5 billion range, McNealy said.

Redmonk analyst James Governor lauded the deal Tuesday.

"Sun had some integration technology before, but this fills it out pretty well," Governor said. "One of the key things is that SeeBeyond is built on Java from top to bottom. That makes such a difference for Sun's ability to integrate the software into its business."

Sun and SeeBeyond have history. Last October, the vendors formed a technology and marketing partnership to deliver products for building SOAs and for processing product-tracking data gathered from retail supply chains.

SeeBeyond currently ports bits of ICAN 5.0 to Sun's JES and earlier this year released a reference architecture that can act as a guide for customers who want to integrate RFID data with back-end enterprise systems.

Joint customers include Blue Cross Blue Shield of Massachusetts, which is using SeeBeyond technologies to improve business processes.

Sun, which has launched its Project Kitty Hawk to build SOAs from its many Java components, considers itself a leading purveyor of distributed computing in a space that includes IBM, HP, Microsoft and several others.

The Santa Clara, Calif., company is coming off a bid to acquire StorageTek and a renewed interoperability partnership with rival IBM.

SeeBeyond stockholders will receive $4.25 per share in cash for each SeeBeyond share for $387 million, including the assumption of employee stock options.

Should the deal be completed this fall as expected, SeeBeyond will be integrated with Sun. A joint Sun-SeeBeyond team will plan the integration.