Progress Software Corp. is snapping up Neon Systems Inc., maker of middleware software to plug into data and applications stored on mainframes.
The two companies on Tuesday announced that Progress DataDirect Technologies subsidiary is making the $6.20 per share cash tender offer for all outstanding share of Neon common stock, for a total of about $68 million.
According to a statement released by Progress, the offer gives Neon stockholders a premium of about 46 percent.
Neons technology supports SQL access through ODBC and JDBC. It also enables Web services integration with mainframes for SOA (service-oriented architectures) and real-time event processing.
DataDirect already offers products such as database drivers that cover major relational databases, operating systems and data access standards.
The combined companies will be able to offer standards-based access to data sources stored on the mainframe, including DB2, IMS/DB VSAM, Adabas, CICS/TS, IMS/TM, CA-IDMS and Natural, along with relational databases such as Oracle, DB2, SQL Server, Sybase, Informix and Progress OpenEdge.
Rick Reidy, president of DataDirect Technologies, told eWEEK that the merger will help the company satisfy OEMs whove been asking DataDirect for help with access to key platforms and key data sources that the company hasnt yet supported.
"For larger corporations and many software companies that sell product into these corporations, not having mainframe integration and a mainframe product solution has always been a thorn in our side," he said.
"We think the combination of what these guys provide with our classic business makes a tremendous amount of sense."
The "icing on the cake" is the fact that Neon has embarked on a mission to support SOA on the mainframe, which is another area customers have been asking for, Reidy said.
"In addition to multiple platforms, multiple data sources, multiple APIs, and different types of data like XML, how people interact with data has also become an area of innovation," he said.
"People are asking, Give me the data when something happens, or Give me a stream of data and let me process that stream as opposed to querying it."
RFID would be an example of that type of data stream, Reidy said. When a pallet moves through a warehouse, it generates an event. Rather than querying the database to ask for the event, customers want to be told when the event happens.
Its a "different interaction model," Reidy said. "To make a long story short, its not just how you get at it and where it is, its how you interact with data" that matters to customers nowadays, he said.
"Add it all up, our strength in the relational database market, and our OEM channel, plus [Neons] strength with an equivalent area in the mainframe, plus SOA, [makes for] tremendous strength. Both companies will sell a lot more together than separately."
Reidy said that there will be product integration, although not necessarily right out of the gate. The two companies products dont overlap, since they run on different platforms. But still, it will make sense in the long run to integrate products such as some APIs that Neon supports and DataDirect doesnt, he said.
The merged companies, which will be under the DataDirect banner, will also explore XML, XQuery and the ability to extract XML-oriented data from mainframes with newer XQuery APIs.
That will help to answer the hunger for XML, Reidy said.
"We have found … a ton of people out there building portals or Web sites or perhaps, even more significantly, if theyre doing data integration, [they have] two applications to share data … and everybody has more or less standardized on XML as the interoperability grammar. People are writing Java code, transformation code, that aggregates feeds to turn into single documents."
DataDirect, along with vendors such as IBM and Oracle, are codeveloping XQuery, the standard for querying XML.
DataDirect has built a product, called XQuery engine, that can be embedded into an application. XQuery engine is used by portal developers writing transformation code who have to write a lot of SQL and XML code.
With XQuery engine, they can issue one query and access all data sources, as it performs conversions and transformations in a standards-based way.
How DataDirect would fit that product into mainframe databases would be to access stored XML, pull it out and let programmers manipulate it in their applications, Reidy said.