Web 2.0 company buys SOA company: hmm...

Acquisitions are a dime a dozen (okay, make that a billion a dozen) in the SOA space, and we've seen plenty of specialized SOA vendors get swept up by larger infrastructure players over the past couple of years.

From enterprise service bus to integration on demand -- the shape of things to come?

But the latest acquisition has a funky aspect to it -- the acquirer is a Web 2.0 SaaSy company, Workday, which is acquiring Cape Clear, an ESB company. (ZDNet colleagues Dan Farber, Dana Gardner, Phil Wainewright have weighed in on the news as well.) Workday offers ERP applications via the SaaS model, and has been quite an interesting story over the past year or so. They call themselves the "on-demand alternative to ERP." (SAP seems to have taken note, as they announced they plan to offer SaaS-based ERP via "Business By Design")

How does Cape Clear fit into this picture? According to CEO Annrai O'Toole, this reflects something he's been talking about for some time -- a movement away form Big IT and Big SOA to the delivery of software-based services on an as-needed basis:

"For those of you who may be a little surprised at a hosted applications company buying an SOA and Enterprise Service Bus company, you shouldn’t be. This is really the logical outcome of many of the things I’ve written about ...over the last several years... 1. SOA needs to be kept simple and focus on the business side of the house, 2. SOA is about enabling applications, not technology, 3. The future of SOA is tied up with the whole phenomena of 'On Demand.'"

Workday is leveraging its Cape Clear purchase as "Integration on Demand," (thank goodness they're not calling it Integration as a Service, or IaaS), which addresses one of the thorniest obstacles to SaaS -- the ability to tie on-demand applications and data with existing on-premise systems. With Cape Clear ESB, Workday says it "can offer both packaged and custom integrations that can be designed and deployed much more quickly than on-premise approaches."

Not everyone looks upon the acquisition so positively, though. Ronan Bradley makes the observation that no SOA middleware company has ever really seemed to have broken into the big leagues, opting instead to be acquired and re-directed into other pursuits.

Ronan, who was CEO of SOA middleware provider PolarLake, observes that his former company "has repositioned itself to take advantage of a specific niche (Reference Data Distribution in financial services)." Now, he notes, "Cape Clear has disappeared from the ’traditional’ enterprise middleware market to become part of a SaaS play."

Ronan also notes that the trend has been for smaller middleware vendors to get "squeezed between the industry giants with comprehensive software stacks and service arms on the one hand and [open source software] projects on the other."

Is this a good, bad, or indifferent thing? Ronan is concerned that the disappearing base of smaller, specialized SOA vendors does not bode well for innovation in this space.

Ironically, if you're an entrepreneur looking to make your mark with a start-up these days, you're more likely to launch a Web 2.0-style company (ranging from social networking to mashups to SaaS) than an SOA company. Hence the irony of a Web 2.0 company now buying one of those SOA companies that burst on the scene not too long ago.

One more thought: hopefully, Annrai will continue speaking his mind about innovation and the industry -- we need more of that.