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IBM to Buy Into XML Messaging

IBM has acquired partner DataPower in a bid that will launch Big Blue into the application-oriented networking market Cisco was expecting to dominate.

Cambridge, Mass.-based DataPower makes hardware appliances that integrate, accelerate and secure XML-based messages from computer to computer to improve transactions.

This is an increasingly important function thanks to the proliferation of XML-based Web services that threaten to clog networks at a time when corporations are trying to accommodate more transactions and orchestrate business processes.

Cisco entered the market in June, prompting praise from analysts who believed the company needed to diversify its revenue streams.

But it had no large threats in its way, with standalone startups like DataPower, Reactivity, Layer 7 and Forum Systems trolling for customers.

Enter Big Blue and its multi-billion-dollar market capitalization.

Financial details were not disclosed, but IBM said in a statement it plans to introduce a family of appliances based on DataPower technology to help it boost its service-oriented architecture (SOA) offerings.

The deal seems to be perfect.

DataPower has been looking for more exposure to boost its revenues. To this point, IBM has had a broad, deep suite of SOA software and services but no true hardware combination to offer customers one single solution to meet their distributed computing needs.

Adding DataPower fills a sizeable hole in Big Blue's SOA portfolio, because it will be able to offer secure, speedy and integrated XML messaging from one box, rather than a bunch of point solutions from WebSphere and IGS.

ZapThink analyst Jason Bloomberg agreed.

"DataPower is the sales leader in the application-oriented networking space, and they have already cultivated solid relationships with the WebSphere, IGS, and hardware groups," Bloomberg said. "DataPower's product suite of integration, security, and performance appliances will fill various holes within IBM's broad SOA offering."

It is unclear how Cisco will respond, especially as the networking giant and IBM have been symbiotic partners for years. Forrester Research analyst Randy Heffner sees room enough for both vendors in the nascent space despite the overlap.

"This is a perfect dichotomy to show the tension in future IT architecture design," Heffner said. "XML's inspectability opens options for where to deal with it.

"Cisco, with AON, puts forth the argument that you can push XML processing farther down into the network. IBM, with DataPower, reminds us that XML needs tight integration with applications and application platforms.

"In the end, the wide variety of XML usage scenarios will likely prove that both models are needed," Heffner said.

Customers should be pleased. The purchase will give customers two major vendors to acquire competent Web services transaction processing engines.

The most well known in a group that includes Reactivity, Forum Systems and Layer 7, DataPower has cultivated many relationships in the space, particularly with IBM.

IBM's global services group recently agreed to resell DataPower's appliances.

At SuperComm in June, DataPower unveiled a new networking blade geared toward speeding up XML content in IBM's BladeCenter T for telecommunications carriers.

DataPower also earlier this year achieved integration and interoperability of its XS40 XML Security Gateway with IBM's autonomic computing environment.

DataPower CEO Jim Ricotta will continue to manage DataPower and will undertake additional responsibility within IBM's WebSphere software group. DataPower employees will become IBM employees.