It’s a win-win situation, as the marketers say. Analysts note that CrossWorlds’ products fill holes in IBM's application server and web services strategies. The same people say that five-year-old CrossWorlds has never made a profit and probably needed propping up financially next year. IBM says while its WebSphere range handles transactions and integration at a horizontal level, CrossWorlds wares will helps it serve vertical industries like industrial manufacturing, process manufacturing, financial services and telecommunication.
I note this intended deal because just a few weeks back IBM gave us a rundown of its technology offerings. I asked a question along the lines of where there might be gaps in Big Blue’s product range and so what sorts of companies the company might entertain the idea of buying.
The response was understandably a trifle acerbic. “Do you want Lou Gerstner’s shopping list?” “Yes please,” I replied.
Of course, if we, or anyone else, could spot gaps in the armour of the largest vendors – those with coffers spilling over with cash -- we’d be laughing all the way to our stockbrokers.
Some, like Cisco, CA and Microsoft, have a history of regular acquisitions. It’s one way of picking up sexy technology and maintaining the revenue growth that’s necessary to lower the blood pressure of stock analysts.
Microsoft’s growth trajectory, of course, is towards the enterprise. Its purchase of Great Plains a year ago was one of most public signs of that. Just like IBM and CrossWorlds, the two firms had been partners for years. Of course, selling an application suite such as Great Plains, which includes payroll, HR, accounting, CRM and e-commerce software, is also a great way to sell operating systems and databases and keep that growth curve curving along. But it’s also a potential money-spinner in itself. Microsoft business productivity group head Jeff Raikes said in January that he intends to create an application suite for running a business that one day might rival the Office suite. No one should be in any doubt that if it so wants to, Microsoft will do just that.
But by buying Great Plains, Microsoft invaded some of its traditional partners’ turf. Read it how you like, but longtime friend SAP’s move to back the software development platform based on Java over Microsoft’s .Net web services approach is no encouraging slap on the shoulder that, hey, bygones are bygones. SAP head Hasso Plattner is reported to have said that the ERP giant will “figure out” a way to live in harmony with Microsoft's web services philosophy.
Microsoft still has plenty more room to move into the enterprise, in operating systems, applications, databases, e-commerce, systems management and other areas. Meanwhile, it hasn’t forgotten its consumer roots, advancing swiftly on the games (Xbox) and handheld (Pocket PC, Tablet) fronts.
What else? Aside from the “please, no more” excitement around web services, customer relationship management, content management and enterprise integration integration (EAI) software are the hottest niche markets around. Microsoft recently bought content management specialist NCompass Labs, though its content strategy apparently compels you to use all Microsoft parts, such as SharePoint Portal Server 2001 and SQL Server.
The problem is that SharePoint isn't terribly robust, says Lou Latham, an analyst at Gartner. "They're not players in the large-scale, global, heterogeneous software environments such as SAP, Domino, WebSphere and WebLogic," says Latham. It apparently also doesn't tolerate Oracle databases. Hardly an enterprise approach.
BizTalk is a key part of Microsoft’s .Net and EAI strategies. In fact it hopes to dominate EAI with BizTalk. "In the short term, we're competing with webMethods, Vitria and CrossWorlds," says BizTalk Server product manager Dave Wascha. "We don't see them being around for very long." Meanwhile, dedicated EAI vendors are working furiously to be useful to both the various brands of web services and the more familiar application server and legacy system integration markets.
And so to CRM. Microsoft, of course, partners with specialists like Onyx, Pivotal and Siebel. Most of the ERP leaders are finding keen demand for CRM among their customer base. They need growth as much as anyone. Analysts eye an ongoing CRM spurt.
Computer Company Buyout can be an interesting game. Just watch your playing pieces.