SOA vendor Wakesoft to shut down Monday

Wakesoft, a privately held maker of software for building service-based Java applications, will close its doors on Monday, a victim of consolidation in the infrastructure software market, the company’s chief executive said Friday.

Wakesoft had been losing deals recently to larger software providers such as IBM and BEA, which have also been promoting software for building flexible, service-based applications, said Shirley Foster, Wakefield’s CEO. Hence the company was unable to meet its investors’ goals, she said.

“It’s incredibly hard in this environment to be a critical bit of infrastructure software and a small, privately funded startup. … The IT organizations are looking for a guaranteed vendor and are certainly consolidating their vendor relationships,” she said.

One analyst said the pace of such closures is only likely to quicken as the big software players continue to enrich their product lines with technologies and products for building a service-oriented architecture, the latest trend in the software industry.

“As major vendors realize how real the SOA trend is, and how critical it is to solving some of the long standing issues around business integration, they are seeking to consolidate the market in order to offer complete solutions to their customers,” said Ron Schmelzer, a principal analyst with ZapThink.

“We expect many of the different SOA-related markets to consolidate through acquisition, merger, or failure of many of the emerging startups and incumbent vendors in the space,” he said.

Based in San Francisco, Wakesoft was founded in 2000 and employed 30 people at its peak, Foster said. Its customers include The Hartford Financial Services Group, Fisher Scientific, Great American Insurance and Mitchell International, according to its Web site.

Wakesoft has informed its customers of its plans to shut down and is working with them to try to make alternative arrangements for supporting their products, Foster said. She declined to say whether Wakesoft tried to seek a buyer before closing down.

The company has escrow agreements with many of its customers, meaning its source code for its products has been entrusted with a third party, to be made available to customers when Wakesoft shuts its doors on May 31. Such escrow deals are a popular way of providing some assurance for companies working with smaller software providers that they won’t be left hanging if the vendor goes out of business.