Mercury buys Systinet in SOA governance play

$105 million deal adds registry, other products to Mercury fold

Mercury Interactive expects to become an SOA governance juggernaut through its acquisition Monday of Systinet, a provider of governance and lifecycle management offerings for SOA.

The $105 million, cash-based deal is intended to enable Mercury customers to take a lifecycle-based approach to boosting the quality, performance, and availability of SOA business services, according to Mercury. Systinet's technology will bolster Mercury's "Business Technology Optimization" (BTO) approach to ensuring business outcomes in IT.

"We're very excited about this because we believe this allows us to expand very significantly the definition of BTO into SOA," said Christopher Lochhead, chief marketing officer at Mercury. "Mercury's been doing a bunch of things in SOA for a while, but this is a new level of capability built around this notion of what you might think of as the integrity of SOA applications."

While SOA offers a faster time to market for application services, the large numbers of services generated in an SOA nonetheless introduce new complexities that Mercury hopes to address with its Systinet acquisition, Lochhead said. 

"The ramifications of [these new services] are really a material increase in complexity and the rate of change, which increases business risk as a result of the potential for chaos," he said. The way to "chaos-proof" SOA is by ensuring integrity of how SOA components work together, said Lochhead.

"As we move to SOA by adding Systinet technology, we really become the go-to company for the CIO as well as the architecture group, the operations group for moving to SOA," he said.

Governance capabilities are critical for Mercury. The company defines governance as the delivery of a predictable, consistent SOA, with control, visibility, and integrity to ensure the reuse of business services. Optimizing quality, performance, and availability of SOA applications also is part of governance, according to Mercury.

Key Systinet products cited include Systinet Registry, which is a UDDI-compliant registry for managing and publishing reusable business services and other SOA services, and Systinet Policy Manager, for streamlining policy creation and management and automating service validation.

The registry is key for Mercury, said analyst Frank Kenney, of Gartner. "It puts them squarely in the SOA world by offering a registry," he said.

"It gives them the big foot in the door that they've been looking for," Kenney said.

Systinet customers, meanwhile, get the stability of having a larger vendor behind Systinet's technology, Kenney said. "The big benefit is Systinet customers were always struggling with this very small vendor and its viability, always asking the question, [is Systinet] going to have the money to do the things they need to do," Kenney said.

A Systinet official had the same perspective. "Certainly, becoming a part of the Mercury [family] provides that security," said Thomas Erickson, CEO at Systinet, which will be run as a business unit in Mercury. Systinet has been in existence approximately five years and has 170 customers.

Mercury and Systinet have shared the commonality of independence and the ability to work with multiple vendors, Kenney said. Systinet has partnered with companies such as BEA Systems and Oracle.

Analysts said the acquisition may signal a trend in which smaller companies that have roots in Web services management and SOA governance are bought up by larger vendors.

"We see very rapid consolidation in this market," said Ronald Schmelzer, senior analyst at ZapThink.

Infravio is another governance vendor that has been eyed by other companies, according to Kenney. "What I can say is we [continually] get calls about acquisitions and overall viability and worth" regarding Gartner clients, Kenney said, with Infravio just one vendor that has attracted attention.

Copyright © 2006 IDG Communications, Inc.

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