The once-hot middleware market shows even more signs of cooling, with five companies reporting slower sales or missed earnings projections.
The slowing stems in part from a realization by businesses that they need to make their internal systems work together before launching ambitious e-business efforts, experts said.
“The market has evolved from a best of breed to a suite,” said John McPeake, a securities analyst of Prudential Securities. “The internal stuff of companies is all screwed up, and they have to fix that before they go outside to other companies.”
Except for supply chain integration projects, the primary reason for purchases has shifted from business-to-business (B2B) integration to integration of internal data systems, said Phillip Merrick, chairman of webMethods.
B2B integration was a catalyst for customers that did not want to be left out of the move to public and private exchanges, but then realized that they had to integrate internal computing systems first, said Kathleen Mitchell, SeeBeyond Technologys senior vice president for marketing.
“I agree with Phil [Merrick] if he is saying that B2B is going away, and so is application integration and application services, and they are all becoming part of an e-business platform,” said Iona Technologies CEO Barry Morris. Iona and CrossWorlds Software are two middleware companies that have not preannounced down quarters.
Merrick said webMethods is seeing weakness in all customer segments. Although sales in Asia Pacific countries were up, sales in Europe grew less than expected. WebMethods reported that revenue for the June quarter will be about $55 million, down from the previous quarters $61.8 million in sales.
Other middleware companies announcing gloomy projections recently include Neon Systems, SeeBeyond, SilverStream Software and Vitria Technology.
