It's Open Season In The Integration Space!

During the past month there has been a rash of acquisitions/mergers announced that will have a direct impact on many integration software and service providers. First let's look at the details.

IBM's announcement that it will acquire Lombardi tops the list with the highest potential customer impact. The IBM WebSphere stack is widely used and the Lombardi acquisition will provide stronger human-centric BPM features to what is already available to IBM customers. Look at Clay Richardson’s blog for more specifics on the IBM/Lombardi deal.

Progress Software has also jumped into the fray with its announcement earlier this week that it will acquire BPM provider Savvion. This will fill a significant gap in Progress's software portfolio and enable the vendor to compete more effectively against other major providers of comprehensive integration solutions that address application integration, BPM, SOA and B2B from a common technology stack. Again, refer to Clay Richardson's blog on this subject for more details on what this means from the BPM perspective.

TIBCO announced late last week that it will be acquiring Foresight Corporation which provides leading edge HIPAA compliance solutions. This will likely give TIBCO an edge in competing for new customers in the healthcare sector.

And most recently, B2B managed services provider Liaison has just announced that it has acquired the assets, customers and operations of ADX, another B2B service provider. This deal will give Liaison 3,000 new customers and two of its own data centers for supporting B2B operations.

Also, I've already blogged and written about the GXS/Inovis merger (see my blog on "The Impact of The GXS/Inovis Merger'), so I'm not going to take any more time on this subject right now.

So much for the “what”. Let's take a look at the "Why?". What is driving this current rash of mergers and acquisitions? For sure there are specific reasons (discussed above) that go beyond pure economics, but we believe there is a common thread that is causing companies that have strived to remain independent for many years to suddenly become more agreeable to being part of a merger or being acquired outright… and it’s the economy.

We believe the on-going weakness of the economy is continuing the limit the sales of integration software and services (especially among smaller players), forcing some vendors into situations they have resisted for years. So in spite of the varied rational provided for each of these acquisitions/mergers, we do believe there is a common factor that underlies all of these actions and those that are likely to be announced over the next few months.

Apparently the famous quote from Bill Clinton’s political advisor James Carville is once again pertinent: “It’s the economy stupid!”

Let me know what you think. Email me at kvollmer@forrester.com. I look forward to hearing your perspective.