IBM Buys DataPower, Adding Hardware to SOA Arsenal

Company officials say the acquisition will help customers improve the performance, security and management of business processes running in service-oriented architecture-based environments.

IBM Tuesday bolstered its arsenal of SOA technologies with the acquisition of DataPower Technology Inc., a maker of XML and Web services infrastructure technology.

Cambridge, Mass-based DataPower has been a force in the XML software and appliance space, where its appliances have been used in enterprise environments to enhance performance and security for Web services applications.

Officials at Armonk, N.Y.-based IBM said the company acquired DataPower to help its customers improve the performance, security and management of business processes running in service-oriented architecture-based environments. And IBM officials said the company plans to introduce a family of SOA appliances based on DataPower technology.

IBM did not disclose financial details of the deal to acquire privately held DataPower.

However, IBMs Software Group pushed the acquisition. More specifically, the WebSphere business unit, headed by Robert LeBlanc, selected DataPower as its target, the company said.

/zimages/6/28571.gifClick here to read about DataPower breaking the terabyte barrier for XML processing.

This news is potentially important to IBM financially because the overall SOA marketplace opportunity is anywhere from tens to hundreds of billions in the next several years, according to analysts. In addition, although IBM software represents only about 15 percent of IBMs revenue it is responsible for about 33 percent of IBMs overall profit, IBM said. And the WebSphere unit has grown revenue in each of the last 29 quarters, according to IBM officials. In its third quarter 2005 earnings announced Monday, IBMs WebSphere business grew 14 percent overall compared with the same quarter last year, the company said.

The Gartner Inc. market research firm has estimated that SOA will provide the basis for 80 percent of new software development projects by 2008.

Data Powers SOA appliance products enable integration and help provide security at the Web services message level. The products include the XI50 Integration Device, which streamlines SOA infrastructures; the XA35 XML Accelerator, which offloads XML processing; and the XS40 XML Security Gateway, which helps provide message-level Web services security. In addition, the DataPower security features complement the SOA security management capabilities of IBMs Tivoli software.

"With more companies taking a modular approach to running business processes through a Services Oriented Architecture, theres a greater need for technology to deal with the commensurate increases in Web services traffic, which can overburden IT systems," said Robert LeBlanc, general manager, WebSphere, IBM Software Group, said in a statement. "DataPowers products address these challenges."

"IBM once again shows its SOA leadership with this acquisition," said Jason Bloomberg, an analyst with ZapThink LLC, in Waltham, Mass. "DataPower is the sales leader in the application-oriented networking space, and they have already cultivated solid relationships with the WebSphere, IGS and hardware groups. DataPowers product suite of integration, security, and performance appliances will fill various holes within IBMs broad SOA offering."

Indeed, added Bloomberg: "Perhaps the most interesting aspect of this announcement is IBMs decision to put DataPower within WebSphere, in the software group. This choice demonstrates IBMs understanding that SOA is not a software problem alone.

Meanwhile, in a statement, Jim Ricotta, CEO of DataPower, said: "XML Web services have become the dominant protocol for connecting disparate systems. DataPowers specialized technology not only provides connectivity, but also message-level security, routing, integration and acceleration. DataPower products nicely complement IBMs SOA capabilities."

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