Loosely defined as software that integrates different pieces of software and enables application deployments, middleware is a critical cog in enterprise IT shops. Realizing the importance of this segment of IT, both IBM and Oracle have been opening up their checkbooks in recent years to buy up companies in the middleware space, adding to their significant middleware product portfolios.
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IBM has bought companies such as business rules software maker Ilog in 2008 for $340 million, SOA appliance maker DataPower in 2005 for an undisclosed amount, and business process management vendor Lombardi late last year, also for an undisclosed sum. Oracle acquired BEA Systems two years ago for $8.5 billion and Sun Microsystems for $7.4 billion, with that acquisition closing just weeks ago. Not content to rest on its acquisition laurels, Oracle bought SOA management vendor AmberPoint earlier this month for an undisclosed amount.
The acquisitions bolster middleware product portfolios that already included technologies such as segments of Oracle's Fusion middleware platform and IBM's WebSphere application server.
Given the growth scenarios presented by IBM and Oracle, legitimate concerns can be raised about the risks of vendor lock-in and attendant rising prices that limited competition can bring. At Oracle shop NASA Jet Propulsion Lab, systems engineer Floyd Teter, who is a member of the Fusion Council of the Oracle Applications User Group (OAUG), expresses concerns about both issues: "The biggest piece of heartache that comes from vendor lock-in, of course, is cost."
Meanwhile, alternative technology sources are becoming limited -- and switching is expensive, he says. "The upfront cost of switching to alternatives -- if you can find alternatives -- is exorbitant," Teter says. Moving away from Oracle in his shop "would cost millions," he says.
IBM Software's general manager, Craig Hayman, rejects the notion of market consolidation in middleware, because middleware itself is about integrating disparate systems. He also dismisses the idea of a market completely dominated by IBM and Oracle: "The customer need is much bigger than any one vendor can provide." (Oracle declined to comment.)
Options outside the IBM-Oracle duopoly
But IDC analyst Maureen Fleming is one of several people who say that lock-in fears are overblown, even as IBM and Oracle consolidate their market grips. Alternative middleware solutions exist from companies such as Software AG, Red Hat's JBoss group, and the open source arena.