Progress buys Iona for SOA wares

Progress Software is buying fellow SOA infrastructure vendor Iona Technologies for about $162 million, or $106 million net of cash and marketable securities.

Iona's board has already unanimously approved the deal, which is expected to close in September.

SOA refers to an IT architecture approach and related products that eschew monolithic applications and instead separate functionality -- such as checking a customer's buying history -- into interoperable "services," giving developers more flexibility and the ability to reuse chunks of code in multiple programs.

Progress, with a market capitalization of about $1 billion, stands as one of the larger independent vendors of SOA technologies. One of the Bedford, Mass., company's core products is Sonic ESB, an enterprise service bus. ESBs serve as a type of centralized way station for SOA implementations, connecting services and orchestrating their combination and use.

Iona, based in Dublin, sells the Artix product line, which includes its version of an ESB; Orbix middleware, for integration projects based on the CORBA (common object request broker architecture) standard, which has been called a precursor to SOA; and FUSE, an open source SOA line. All three will be maintained, according to Progress.

The two companies' technologies are complementary and interoperable through standards-based means, Progress said in a statement.

"Finally, a SOA infrastructure deal that makes good sense on both sides," Jason Bloomberg, an analyst with the SOA consultancy Zapthink, said via e-mail Wednesday. "Iona gets to be part of an organization that has strong sales and marketing, as well as a deep customer base, and Progress gets some of the better technology on the market at what is arguably a fire-sale price."

Another observer of the SOA space had a similar reaction.

"Combined with Iona's [enterprise service bus] and middleware products, Progress will emerge as a full-feature SOA infrastructure provider, but with a large installed base in deployed client-server and Web applications and a strong presence in Iona's stronghold of finance and telecoms," wrote Dana Gardner, principal analyst of Interarbor Solutions, on his blog Wednesday.

"The merger also shifts Progress's competitive landscape, putting it more up against IBM, Oracle, and Red Hat," he added.

Gardner noted that the sale came as no surprise, as Iona recently indicated it was looking for suitors.

Progress' stock was trading at $26.26 early Monday, up $0.80.