BEA Warms to BPM With Fuego Buy

BEA Systems today said it has acquired Fuego for $87.5 million in cash,
adding one of the last standalone players in the business process management
(BPM) software market for coordinating Web services with processes.

Fuego’s BPM portfolio stands to be a key weapon for
BEA in its fight for SOA supremacy versus Oracle, IBM and Microsoft.

BPM is an important part of a service-oriented architecture (SOA)
. With hundred or even thousands of Web services transactions flying across different networks, companies building SOAs need reliable technology that can fit the Web services with the business processes.

BEA, which has acquired several SOA and software development companies in
the last 12 months, competes with Oracle, IBM and Microsoft for large distributed computing contracts in financial services, telecommunications and other large markets.

BEA Executive Vice President Mark Carges said on a conference call today that
Fuego brings BEA the fastest growing player in the burgeoning BPM space,
which some analysts expect to top $1 billion in the next few years.

Fuego has more than 170 customers, including major companies Southwest
Airlines, United Healthcare, JPMorganChase and British Petroleum.

Carges noted that the two management teams got to know each other because
Fuego was a partner of SOA technology provider Plumtree Software, which BEA acquired last fall.

He said BEA will tuck the smaller company’s portfolio into its AquaLogic SOA
product family, where it will become the foundation of the new BEA AquaLogic
Business Service Interaction product line.

ZapThink analyst Jason Bloomberg said acquiring a BPM company like Fuego
makes a lot of sense because BEA’s existing process tooling wasn’t
particularly suited for service orientation, the bedrock of AquaLogic.

“Perhaps the greatest challenge that BEA will have when integrating Fuego
into Aqualogic is that Fuego takes a code-generation approach to BPM, which
fundamentally isn’t service-oriented,” Bloomberg said.

“As a result, BEA has some work to do to make sure the Fuego technology fits
into the service infrastructure (i.e. Aqualogic) rather than the
application infrastructure (WebLogic).”

Fuego CEO Jon W. Lauck said he was happy to make the deal because Fuego had
felt a bit constrained because of its size.
He said Fuego and its 100 employees from its Plano, Texas, headquarters had a
hard time keeping up with the demand and needed to scale.

“We found that we were brought into and competing at the highest level of
the infrastructure space,” Lauck said. “BEA has the breadth and depth and
size to allow us to go out and do a thousand more of these large
implementations.”

Almost all of Fuego’s employees, including Lauck, have joined BEA.