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Blogs > MWD Advisors

Software AG aims to fire up its platform future with Terracotta
Neil Ward-Dutton By: Neil Ward-Dutton, Research Director, MWD Advisors
Published: 27th May 2011
This work is licensed under a Creative Commons License
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With its recent focus on Business Process Excellence following its acquisition of IDS Scheer, it’s perhaps easy to forget that Software AG still has a healthy business as an integration middleware provider.

The purchase of Terracotta, announced May 23, doesn’t immediately stand out as a great fit for a company that pitches itself as helping customers with Business Process Excellence; but it absolutely does potentially help fire up Software AG’s integration middleware business.

The acquisition of Terracotta should potentially help Software AG in two ways:

  1. To enable it to deliver significantly increased scalability and price/performance for its large integration middleware customers. Integrating Ehcache, BigMemory and Terracotta Server Array capabilities with its existing ESB, application integration, MDM and other integration components will enable Software AG to drive these technologies into more demanding customer scenarios more cost-effectively – and bolster its defenses against the ever-present integration middleware business onslaught from IBM and Oracle (both of which have made significant moves in the caching platform area).
  2. To help it evolve its integration middleware platform into a platform-as-a-service (PaaS) technology layer that customers can deploy either on-premise or on an externally hosted IaaS platform. This latter initiative is ongoing, and I’m told it’s set to bear fruit in the coming months. Other enterprise infrastructure platform players (like IBM and TIBCO) are making plays here: it makes sense for Software AG to do the same.

All this perhaps looks a little like Software AG is playing catch-up against the other big infrastructure software players. By going for Terracotta, though, Software AG has a potential trump card in its hand: Terracotta’s very large existing open-source developer community (by virtue, largely, of ehcache). If it can find ways to bring this community with it as it tackles (1) and (2), that could give Software AG a real leg-up.

Nurturing such a community isn’t straightforward, though – you can’t ‘buy’ such a community in the same way that you might buy a business and its assets. Clearly, through the sale to Software AG, Terracotta as a business gets access to business scale – Software AG might provide it additional development resources, as well as of course field sales and marketing resources. That doesn’t  necessarily straightforwardly translate into a benefit to the surrounding community, though.

I’m not a deep expert in this area, but it’s clear to me that one of the things Software AG will need to look at is ways it can provide bridges between this developer community and its existing portfolio of commercial enterprise software technologies. It’s not clear yet to what extent Software AG might ‘OSSify’ its current portfolio, particularly in the direction of the PaaS development work it’s gearing up for. Like James Governor said, the bar for open source PaaS, driven by developers, has been set awfully high by VMware. Everyone else needs to get inline. But this is something I’ll be watching with great interest.

One last word: don’t take these references to ‘Cloud platforms’ to mean that Software AG aims to become a public cloud service provider; it’s an infrastructure software company and it will continue to do what all smart infrastructure software companies do – sell shovels to prospectors.

What do you think – does this move fire up Software AG’s business, or is there a big fall-out waiting to happen?

Personally I hope things turn out well; enterprises and developers alike need a competitive marketplace for integration middleware and other related infrastructure software, with strong independent specialists – competition from independents keeps things (more) honest and open, and drives service and innovation. Integration and middleware are all about “open”.

HuycwOzudJM

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