Workday Acquires Cape Clear

Workday will add on-demand integration capabilities to its portfolio of middleware products. 

Oracle's acquisition of Hyperion last year started an avalanche of consolidation in the business intelligence sector. Its pending purchase of BEA Systems might start a merger mania in the middleware sector.

To wit: On-demand ERP (enterprise resource planning) software maker Workday announced Feb. 6 its acquisition of Cape Clear Software, which develops integration technology.

While Cape Clear's customer base is significantly larger than Workday's -- Cape Clear has about 300 customers to the one-year-old Workday's 38 -- the acquisition is really about making Workday's ERP applications easier to integrate with other applications, rather than providing a stand-alone integration product, company officials said at a press conference.

"Cape Clear is the most advanced ESB [enterprise service bus] provider on the marketplace, and as you saw with the acquisition of BEA and Oracle and with SAP building out its NetWeaver [integration] stack, middleware is just another part of applications. It's just the way the market is headed in the future," said Aneel Bhusri, Workday co-founder and president and board chairman of Cape Clear.

Bhusri said that despite the market direction -- applications vendors becoming integration platform providers -- Workday primarily acquired Cape Clear because of its people. (Workday's predecessor, PeopleSoft, also acquired by Oracle, was known as a people-centric organization, a philosophy the newer company intends to maintain).

Cape Clear CEO Annrai O'Toole will join the Workday management team as vice president of integration. Workday's integration team, based in Mountain View, Calif., will report to O'Toole. Cape Clear will maintain its headquarters in Dublin, Ireland, and the office will become a second development center and initial base for Workday's entr??«e into European markets, Bhusri said.

Cape Clear's ESB will no longer be sold as a stand-alone product. Instead, O'Toole said his team will focus on some basic but complex objectives: making Workday the easiest application to integrate with for the company's enterprise customers; making it simple to integrate outside services like ADP payroll services; and making it easy to integrate with third-party systems like LinkedIn, Google and Microsoft Office.

"Those three, that's a pretty large challenge," O'Toole said.

Where Workday -- with Cape Clear's technology -- will differentiate itself is by providing on-demand integration capabilities. To clarify what on-demand integration means, O'Toole said that the general concept with on-premise integration software is that companies typically buy applications, buy a middleware suite and then build the integrations on-premise.

"You've got the task of figuring out all this middleware, writing all this code and making it all work, and the skill set to do that is pretty rare," he said. "We're building all these integrations and hosting them in the Workday data center. We're doing this today. It's not an airy-fairy idea of 'wouldn't it be nice if this worked.'"

More importantly, O'Toole said, when companies code on-premise integrations and then later upgrade their applications, they have to redo the integrations. As Workday upgrades its applications using a multi-tenant architecture -- customers are upgraded simultaneously -- the integrations are likewise automatically upgraded.

"It's a problem we take off the plate for you," he said. "Its why were all here in the room today."