CA set off the wave by acquiring Adjoin Solutions Inc. last summer. Hewlett-Packard acquired Talking Blocks, another Web-services management firm, in September. And last week, Oblix Inc., which makes technologies for identifying system users, acquired Confluent Software Inc., which sells the Confluent Web Services Management Platform. "It's part of an ongoing consolidation," Tcherevik says.
But the Oblix acquisition didn't make sense to everyone. "There's been some collective head scratching" over the move, says Andy Yang, senior director of marketing at Westbridge Technology, a Confluent competitor.
Ron Schmelzer, an analyst with XML research firm ZapThink, says Oblix "wasn't the first company that came to mind" when he considered potential buyers of Web-services-management firms. Until now, identity management has been a system at the heart of the enterprise, controlling access to internal applications.
Now, Schmelzer says, Web services may be extended outside the company to business partners, provided they're linked to an access-control system, such as Oblix's NetPoint. The Oblix move may signal "another wave of consolidation" as identity-management vendors team up with Web-services management, he adds.
Rick Caccia, director of Oblix product management, says the Confluent Web-services platform will continue to be offered as a separate product, but Oblix customers were looking to use their identity-management infrastructure as they extended Web services to business partners, he says.
Oblix and Confluent share a venture capitalist, Apax Partners, but the Apax representatives on Oblix's board of directors excused themselves from negotiations, Caccia says. "This deal did not come through Apax. Confluent has the best general platform" for Web-services management of those Oblix inspected, he says. Anne Manes, an analyst at the Burton Group, says Confluent's platform "has an elegant architecture and is easiest to use."
Manes notes that the Confluent engineering team and key marketing and sales-force staffers were among the 17 of 50 Confluent employees that Oblix retained. That's a good sign that Confluent will continue as an independent product, as well as one tied to the identity-management system, she says. But Confluent's founder and guiding spirit, Rajiv Gupta, is not among the 17. Oblix CEO Gordon Eubanks was formerly CEO at Symantec Corp.
Oblix wanted Confluent's ability not only to examine the origin and header of an XML message, with its destination instructions, but also to inspect its contents for security reasons. By looking at contents, an identity-management system or security system can determine whether the contents are appropriate for the named destination and whether the contents attempt to manipulate any of the destination's systems. Instead of emphasizing services management, Oblix may be more interested in expanding its security offerings, Yang says.
There are still many small firms active in the Web-services management field. Two of the most successful are Actional and AmberPoint, Manes says, but the field is scarcely limited to them. There's also Blue Titan, Digital Evolution, Flamenco Networks, Infravio, Reactivity, Service Integrity, and Vordel, to name a few.
Some of these companies "are struggling to get more than a half a dozen paying customers," she says. "Oblix has 100 customers to up-sell Web-services management to," on top of the identity-management system. "That's a lot easier than selling to new customers," she says.
Schmelzer says the small companies have a two- to three-year window in which to get established, then dominant systems-management and network-management players, such as CA, Hewlett-Packard, and IBM are likely to move into the Web-services-management space and dominate it.
ZapThink estimates there was $194.3 million in revenue in Web-services management last year. That figure will jump to $1.4 billion this year and $8.8 billion in 2005, reflecting both the growing use of the software and the larger role of dominant players in selling it. By 2010, ZapThink expects the market to reach $30.4 billion.