Sun To Buy SeeBeyond For $387 Million

The deal, code-named Big Bear, would give Sun a more significant position in the commercial Web services and business integration software market, the sources said. Sun Chairman and CEO Scott McNealy is slated to announce the acquisition Tuesday in his morning keynote at the JavaOne conference in San Francisco.

Expected to close in the fall, the SeeBeyond deal comes just one day after Santa Clara, Calif.-based Sun publicly revealed that it would open-source its Enterprise Service Bus, Sun's reference implementation of the Java Business Integration (JBI) specification.

"Customers are saying the best-of-breed mix and match and having a separate integration partner is something they're tired of, and [having their integration] under one shop and one service-level agreement will be attractive to them," McNealy said during a call with financial analysts early Tuesday morning.

SeeBeyond will give Sun more weapons in its Web services and service-oriented architecture (SOA) arsenal, company executives said. "It's a huge opportunity to talk to customers about building composite applications," McNealy told analysts.

SeeBeyond's Integrated Composite Application Network (ICAN) Suite provides back-office integration, B2B integration, ETL master data management, business-process management, workflow, business activity monitoring, application adapters and graphical development tools for composite application creation based on Web services. With SeeBeyond's ICAN, Sun said it will extend the Java Enterprise System platform to a sixth suite, the Sun Java System Integration Suite.

SeeBeyond has trailing 12-month revenue of about $167 million, 60 sales representatives and about 2,000 customers worldwide, including General Motors and Pfizer.

After an 18-month effort, the JBI 1.0 specification was completed June 21. In addition to SeeBeyond, other Sun partners in the JBI expert group include Oracle, SAP, Apache, Nokia, JBoss, Tibco, WebMethods and Iona. BEA Systems and IBM, other major Java partners, formerly supported JBI but walked away from the spec in favor of competing frameworks.

Kenneth Ljunggren, a system architect at Stockholm, Sweden-based Know IT Consulting, said it's a good move for Sun to pick up a commercial, industrial-strength business integration software platform so it can compete head-to-head against Microsoft in the platform and applications space.

"Sun should have something because Microsoft has BizTalk," Ljunggren said Monday evening at a JavaOne party sponsored by JBoss. Know IT Consulting has more than 500 developers working on Java and .Net technologies, he said.

According to Sun, the JBI specification--aka JSR 208--is the core of the Java service-oriented integration bus and component architecture for SOAs. The JBI spec, for example, makes standard a messaging routing architecture and provides a mechanism for combining multiple services into a single, executable Web service or composite application.

Sun is expected to rally its partners to its open-source implementation of JBI and its commercial, Sun-branded business integration products once the SeeBeyond deal closes. On May 19, Sun announced the JBI Initiative for iForce Partners.

Sun partners with ISVs such as Iona Technologies, which recently unveiled plans to release an open-source implementation of its Enterprise Service Bus. In May, Sun and Iona announced a broad technology and marketing alliance in which Iona's extensible Enterprise Service Bus will be made available for Solaris 10. In addition, the two companies expect to enhance interoperability between Iona's Artix and the Sun Java Enterprise System and participate in joint sales and marketing efforts.

Sun has other specifications and technologies under development to enable business integration on the Java platform. For instance, at JavaOne, Sun unveiled the Java Web Services Development Pack 6.1. The pack, which uses JAX-RPC, will enable the creation of faster, more secure Web services. JAX-RPC is for Web services interoperability across heterogeneous platforms and languages, Sun said.

The SeeBeyond deal is the latest in a string of acquisitions by Sun to elevate its standing in the software and storage markets. Earlier this month, Sun announced a $4.1 billion deal to acquire StorageTek. Other Sun acquisitions include Tarantella, Procom and Nauticus Networks.

This story was updated Tuesday morning with Scott McNealy's comments.