Commentary on IBM WebSphere – Cast Iron Deal

IBM WebSphere announced today that it has acquired Cast Iron Systems. I am already getting calls and emails for my thoughts on this as folks are naturally curious what this might mean for Boomi so I thought a quick post might be a good idea. In short, we think this is great news for Boomi.

First of all we want to extend our congratulations to Ken and the entire team at Cast Iron as we think this is a great outcome for them. It has been a tough market and it’s great to see value creation even in a down economy so well done guys.

For Boomi, the announcement came as no surprise. IBM has a long history of acquiring appliance-based companies, from DataPower in the XML world to Diligent in the backup area.  Cast Iron has been offering an integration appliance for many years to traditional on premise focused enterprises and WebSphere is an appliance-centric business unit so it’s a good fit for both groups. Boomi, on the other hand, has focused exclusively on the cloud computing space – having built a pure cloud-based integration platform that does not require software or appliances. IBM is obviously a very large company and other areas of the company are quite active in pursuing cloud integration strategies so we continue to view IBM as a very attractive partner prospect for Boomi.

If anything, it probably helps to clarify the cloud integration space. Boomi remains the industry’s largest integration cloud with hundreds of global customers, a vibrant open community with over 60 partners (including the major SaaS ISVs such as salesforce.com, NetSuite, Taleo, RightNow and SuccessFactors), the broadest range of connectivity with 75+ SaaS apps and hundreds of on-prem apps supported, and handling the greatest volume of transactions – over 130 million transactions a month and growing rapidly.

We remain convinced that a pure cloud integration platform built entirely as SaaS, is the best model to power the continued growth and success of the cloud computing industry. We made a decision in 2006 to go completely into the cloud ala salesforce.com and we remain committed to that path of execution. In our minds, it only makes sense to integrate SaaS applications with SaaS integration solutions. Our platform also provides a natural on ramp for traditional enterprises to migrate to the cloud, as we offer seamless SaaS-based connectivity to on premise applications (70% of our use cases).  We think the amazing traction we’ve had since launching AtomSphere in the fall of 2007 is a testament to that vision. 

And so to our customers, partners, friends and employees, you can rest assured that we will continue to be the innovation leader in this space and stay true to our vision of revolutionizing the world of integration.

Comments

[Paul Kaniska]

Nice writeup. Interesting that the blog from the leading Gartner analyst on cloud integration contradicts your view on the acquisition -

http://blogs.gartner.com/benoit_lheureux/2010/05/03/ibm-acquires-cast-iron-its-about-cloud-services-integration-not-appliances/

[Clint Wilson]

Good point Paul and I wonder if Gartner will tell us the buyout price and make us all happy or sad in this biz. We are now at 100% off the stock market bottom and I would love to know the multiple they paid.

"within a few weeks Gartner will soon publish a detailed five-year forecast on this interesting market segment."

[Bob Moul]

I saw this as well Paul. The vast, vast majority of Cast Iron's business and clients are on its appliance offering - whether deployed on-prem or hosted "virtually" in an ASP model. Cast Iron only announced a cloud offering (meaning multi-tenant) last month as part of OmniConnect. So unless I'm missing something, what WebSphere bought was a predominantly single-tenant (non-SaaS) appliance-based business.

[Alan Wilensky]

IBM WebSphere is where "boxes" go to die. The DataPower acquisition is probably the most striking example of what a clever technology, designed by geniuses, cannot do.

In 2007 I published a voluminous report on the automotive ecommerce supply chain and networking sector; amongst commentary on the VANs and other issues, such as X12 vs. XML, was a chapter on the "XML Box". http://bit.ly/integrationreport

My take was that general server architectures and advanced server management would allow companies, like, yes, Boomi, to offer better tailored solutions than any box could ever offer.

I also posit that putting integration services or streaming file optimization operations into a "box" is merely a way for the technical management of services operation to "sell" the concepts of certain types of integration to less technical management.

Systems like Boomi, Mulesource, and Snaplogic, others, will always beat the box, that no matter how they claim is open, is just another means to tying up a set of interfaces into a physical space with limited capabilities.

Now, Bob, if we could only get Bommi to adopt ECGridOS, a truly 'out of the box' solution to integrated EDI Communications!

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[TaraSANDERS]

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