Novell Monday announced that it would acquire Silverstream Software to boost its presence in the rapidly developing Web services market.
The networking software giant will pay $212 million in cash, 9 cents a SilverStream share.
Analysts have said that Novell needs to acquire an application server platform to give itself credibility in the nascent Web services market.
"The acquisition shows me that [Novell vice-chairman] Chris Stone is moving pretty quickly to address some of the concerns Wall Street has," says Laura DiDio, senior analyst with the Yankee Group. "They need to stop sitting on three quarters of a billion in cash in the bank and do something with it that can contribute to its business."
SilverStream's J2EE-based products include an Application Server and Web services engine that let them build cross-platform applications, including a messaging platform. The company's Integration server lets IT developers connect via XML to back-end legacy systems and manage business processes. The company's Interacton and Portal Server product lets them build business applications and portals.
SilverStreams' application server and development platform are well-respected, observers say.
"SilverStream is a network management company in a market Novell is trying to get into," DiDio says. "Right now you don't have one dominant player. Novell can bring a lot to the table, if they can execute."
Its eXtend product line lets enterprise-size businesses become Web enabled.
Novell, relying in its eDirectory software, will combine its products with those of SilverStream and create a 'services-oriented architecture. This architecture which allow Web services development, will be standards-based and directory aware. SilverStream's eXtend product line will be rebranded under the Novell name.
The deal, which has been approved by the Board of Directors of both companies, is expected to close as soon as July.
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