IBM Tuesday announced it has acquired XML networking vendor DataPower for an undisclosed amount.
Privately held DataPower makes integration and security appliances for processing XML and Web services traffic — a portfolio IBM says will help its customers with their efforts to deploy service-oriented architectures (SOA).
DataPower’s current 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.
“DataPower’s product suite of integration, security and performance appliances will fill various holes within IBM’s broad SOA offering,” says Jason Bloomberg, a senior analyst at research firm ZapThink. IBM is acquiring the sales leader in the application-oriented networking market — and a company that already has a solid relationship with IBM’s software, hardware and services groups, he says.
DataPower is among a handful of companies to focus on processing high volumes of XML traffic with requisite connectivity, security, integration and acceleration features built into its wares.
In 2003, XML-aware networking hit the IT consciousness when users began to realize that processing bulky XML messages could eat nearly 80% of server processing power if it was done with application server software. Companies like DataPower, Sarvega, Forum Systems, Reactivity and Westbridge began to take off, with hardware vendors such as F5, Cisco and Nortel keeping close tabs on the upstarts.
As product demand as grown, so has activity in the market. IBM’s acquisition of DataPower follows a slew of other acquisitions and partnerships among its competitors.
In August, Intel bought Sarvega, one of DataPower’s biggest rivals. Actional acquired Westbridge in 2004 and just two weeks ago completed a partnership agreement with IBM Global Services for its global SOA Management Practice initiative.
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In October, Forum Systems became a charter member of Microsoft’s SecureIT Alliance, an effort to bring greater integration among enterprise security products on the Windows platform. And just last week, Reactivity announced it is upgrading its XML Operating System (XOS) with support for Integrated Windows Authentication, Microsoft Office Information Bridge Framework and the Liberty Alliance Identity-Web Services Framework (ID-WSF) 2.0 specification.
Meanwhile, DataPower over the last few years has stocked its ranks with industry veterans from the likes of Cisco and Nortel. The company’s founder and chief technology officer is visionary Eugene Kuznetsov, who some call the Marc Andreessen of XML-aware networking.
Kuznetsov had a vision of how the market was going to evolve, says Jeff Fagnan, a partner at Atlas Venture. (Fagnan was an original investor in DataPower while with Seed Capital Partners and led the third round of funding six months ago while with Atlas.)
“[Kuznetsov] created the space, recognizing the importance of XML and the need for enablement from an infrastructure standpoint,” Fagnan says. “The company started with acceleration and moved on to security and integration. The technology is rock solid.”
DataPower wasn’t profitable but has been growing fast, Fagnan says. “The company and the whole market has really been on fire in terms of growth over the past year or so. DataPower has seen 50% quarter-over-quarter revenue growth of late,” Fagnan says. “Despite that, the offer was too good for the board and management to refuse.”
IBM wasn’t the only vendor interested in acquiring DataPower, but it was the best fit, according to Fagnan. “IBM was the best potential partner given its leadership in the middleware space and its thinking about SOA,” Fagnan says.
